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Economy in Brief

U.S. Import Price Strength Tapers Off
by Tom Moeller   June 10, 2011

Pricing strength receded, at least temporarily, amongst internationally traded goods last month. Overall U.S. import prices rose just 0.2% after a little-revised 2.1% April increase. Nevertheless, the gain was stronger than Consensus expectations for a 0.7% decline.

The strength in petroleum eased last month. Prices fell 0.4% as Brent crude oil slipped to an average $116.27 per barrel (+51.6% y/y) from the high of $122.68 averaged during April. The gain in nonoil import prices also eased to 0.4% (4.5% y/y), its least monthly rise this year. (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.)

Earlier strength in imported food & beverage prices tapered off with a 0.5% May decline (+17.5% y/y). Prices for nonoil industrial supplies jumped another 1.6% (12.4% y/y), led by a 19.9% y/y jump in unfinished metals. Elsewhere there was less strength as prices for non-auto consumer goods rose 0.3% (0.9% y/y). Apparel prices rose 6.6% y/y and furniture prices rose 3.8% y/y but home entertainment equipment prices declined 10.6% y/y. Imported auto prices rose 0.5% (2.3% y/y) while imported capital goods prices nudged up 0.2% (1.4% y/y). Computer & peripherals prices were unchanged during May (-3.9% y/y) but excluding computers, capital goods prices rose 0.3% (3.5% y/y).

The rate of increase in U.S. export prices also tapered off to just 0.2%, the weakest increase since July. Agricultural prices fell 2.0% but they still were up nearly one-third from last year, led by a one-half increase in the price of wheat. Non-agricultural goods prices rose 0.5% (7.0% y/y), the least since September. Strength still has been notable for industrial supplies, up 18.8% y/y. Elsewhere, gains were modest.

The import and export price series can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figure is in the AS1REPNA database.

Wages, Expectations, and Prospects for Inflation from the Federal Reserve Bank of Cleveland is available here.

Import/Export Prices (NSA, %) May Apr Mar May Y/Y 2010 2009 2008
Imports - All Commodities 0.2 2.1 3.0 12.5 6.9 -11.5 11.5
  Petroleum -0.4 6.6 11.0 44.6 28.4 -35.9 37.7
  Nonpetroleum 0.4 0.6 0.5 4.5 2.8 -4.1 5.3
Exports - All Commodities 0.2 0.9 1.5 9.0 4.9 -4.6 6.0
  Agricultural -2.0 0.4 2.2 30.1 7.9 -12.8 21.6
  Nonagricultural 0.5 0.9 1.4 7.0 4.6 -3.7 4.5
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