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Economy in Brief

U.S. Import Prices Decline 
by Tom Moeller   July 13, 2011

Pricing strength receded further amongst internationally traded goods last month. Overall U.S. import prices fell 0.5% after a little-revised 0.1% May increase. The decline roughly matched Consensus expectations for a 0.7% drop.

Weakness in petroleum prices, off 1.6%, led the decline as Brent crude oil fell to an average $114.04 per barrel (+53.2% y/y) versus the high of $122.68 averaged during April. Nonoil import prices also fell 0.2%, the first decline since last July. (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 fell 1.9% (+16.9% y/y), the second consecutive down month. Also, prices for nonoil industrial supplies fell 0.5% (+13.9% y/y). Prices for non-auto consumer goods rose a minimal 0.1% (1.1% y/y). Apparel prices jumped 1.1% (7.9% y/y). However, furniture prices rose just 0.1% (4.0% y/y) and home entertainment equipment prices declined 2.5% (-11.9% y/y. Imported auto prices rose 0.3% (2.9% y/y) while imported capital goods prices were unchanged (1.5% y/y). Computer & peripherals prices fell 0.2% during June (-3.9% y/y). Excluding computers, capital goods prices rose 0.2% and by a much-strengthened 3.9% y/y.

U.S. export prices rose just 0.1%. Agricultural prices rose 0.7%, up nearly one-third from last year, led by a one-half increase in the price of wheat. That gain was accompanied by no-change in non-agricultural goods (7.8% y/y). Prices of industrial supplies slipped 0.7% but remained up 19.8% y/y. Capital goods price gains also have been moderate. To the upside, nonauto consumer goods prices have risen 5.2% y/y.

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.

Today's House testimony by Fed Chairman Ben S. Bernanke can be found here.

Import/Export Prices (NSA, %) Jun May Apr Jun Y/Y 2010 2009 2008
Imports - All Commodities -0.5 0.1 2.5 13.6 6.9 -11.5 11.5
  Petroleum -1.6 -0.9 8.1 49.8 28.4 -35.9 37.7
  Nonpetroleum -0.2 0.4 0.7 4.9 2.8 -4.1 5.3
Exports - All Commodities 0.1 0.2 0.9 9.9 4.9 -4.6 6.0
  Agricultural 0.7 -2.0 0.4 31.2 7.9 -12.8 21.6
  Nonagricultural 0.0 0.5 0.9 7.8 4.6 -3.7 4.5
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