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Economy in Brief

U.S. Import Prices Again Lifted By Oil
by Tom Moeller  January 12, 2011

Higher oil prices continued to push up U.S. import prices. During December, import prices jumped another 1.1% after an upwardly revised 1.5% November increase, initially reported as 1.2%. The increase roughly matched Consensus expectations for a 1.2% rise. For all of last year, a 6.8% gain in prices overall was paced by a 28.0% increase in petroleum. Nonpetroleum prices rose 2.8% and reversed most of the 4.1% decline during 2009.

Strength in petroleum prices continued this month. As of yesterday, Brent crude oil prices rose further to $98.69 per barrel compared to $92.06 in December. Non-oil import prices rose 0.4% during December and increased 2.8% for all of 2010. (The y/y change in non-oil import prices during the last ten years has had an 81% inverse correlation with the nominal trade-weighted exchange value of the US dollar vs. major currencies.)

Imported food & beverage prices led again the overall price gain with a 1.3% increase, up 8.3% for the full year compared to a 2.8% decline during 2009. Strength was across-the-board but strongest for meats & poultry (18.3% y/y). Prices for nonoil industrial supplies also jumped 12.5% y/y led by a 29.7% y/y increase in unfinished metals prices. Prices for non-auto consumer goods were unchanged for both the month and the whole year. Appliance prices fell 1.0% for the full year and furniture prices fell 2.9% y/y. Home entertainment equipment prices declined another 3.7% versus 2009. Imported auto prices were unchanged last month and rose a modest 0.6% for the year. Imported capital goods prices ticked 0.1% higher for the month but fell 0.3% for the year. Computer & peripherals prices fell 2.5% during all of the year but excluding computers, capital goods prices rose 0.5% y/y after the 0.7% rise during 2009.

Total export prices rose 10.7% last month and pulled prices up 7.8% during all of 2010 y/y. The gain reflected continued strength in agricultural exports, up 7.8% for the year. Non-agricultural goods prices rose 0.6% last month and 4.6% for the year. Strength has been notable for industrial supplies (11.4% y/y), a gain which reversed the 2009 decline, and nonauto consumer goods, up 2.1% after last year's 0.3% uptick.

The import and export price series can be found in Haver's USECON database. Detailed figures are available in the USINT database.

Inflation, Capital Inflows: Asia and the Challenges of Success in 2011 from the International Monetary Fund can be found here.

Import/Export Prices (NSA, %) Dec. Nov. Oct. Dec Y/Y 2010 2009 2008
Imports - All Commodities 1.1 1.5 1.1 4.8 6.8 -11.5 11.5
  Petroleum 3.9 4.4 4.7 13.7 28.0 -35.9 37.7
  Nonpetroleum 0.4 0.8 0.3 2.7 2.8 -4.1 5.3
Exports - All Commodities 0.7 1.5 0.8 6.5 4.9 -4.6 6.0
  Agricultural 1.7 7.6 2.8 20.2 7.8 -12.8 21.6
  Nonagricultural 0.6 0.8 0.6 5.1 4.6 -3.7 4.5
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