U.S. Import and Export Price Indices for October, 2006

The U.S. Department of Labor's Bureau of Labor Statistics this morning released the price indices for U.S. imports and exports for October, 2006 :

Import Prices
Predicted: -0.8
Actual: -2.0%

Export Prices
Actual: -0.4%

The above percentages represent the month-to-month change in prices for

• Imports: the cost of goods produced in other countries and sold in the U.S.
  
  
• Exports: the cost of goods produced in the U.S. and sold in other countries.
  

Together, these indices offer insight into the status of inflation in the United States, and for the global economy as well. The "predicted" figure is what economists and Wall Street forecasters were expecting, while the "actual" is the true or real figure.

The following is a clip from today's Labor Department report:

"Import Goods

The 2.0 percent decreases in September and October followed increases in each of the prior five months and led import prices down 0.2 percent for the year ended in October. Once again lower petroleum prices, which felt 8.3 percent for the month, were the largest contributing factor to the drop. Despite increasing 23.8 percent from February to August, petroleum prices declined 2.9 percent over the past 12 months. The price index for nonpetroleum imports decreased 0.6 percent in October, the first monthly decline since March, but rose 0.5 percent over the past year.

The October decrease in nonpetroleum prices was led by a 2.7 percent decline in the price index for nonpetroleum industrial supplies and materials. A sharp drop in natural gas prices was the primary contributor to the decline, although a downturn in metals prices as well as lower building materials prices also factored into the decrease. Unfinished metal prices, which were up 36.8 percent over the past year, fell 1.0 percent in October.

The price indexes for automotive vehicles, consumer goods, and foods, feeds, and beverages all rose in October, increasing 0.3 percent, 0.1 percent, and 0.2 percent, respectively. The increase in automotive vehicles prices was the largest monthly gain since a similar 0.3 percent increase in October 2004, and was attributable to year-end model changeovers.

Capital goods prices edged down 0.1 percent in October because of lower prices for computers, peripherals, and semiconductors. Excluding computer prices, prices for capital goods rose 0.2 percent for the month.


Export Goods

Export prices declined 0.4 percent in October following a similar 0.4 percent drop in September, marking the first time the index has decreased in consecutive months in over three years. A 0.5 percent decrease in nonagricultural prices more than offset a 1.1 percent increase in the price index for agricultural exports. Agricultural prices resumed an upward trend after declining 0.5 percent in September. The October increase was led by higher prices for corn, wheat, and soybeans. Prices for agricultural exports increased 5.4 percent over the past 12 months. The decrease in nonagricultural prices followed a 0.3 percent decline in September, which was the first monthly drop for the index since November 2005. Despite the October decreases, the price indexes for both nonagricultural exports and overall exports increased for the October 2005-2006 period, rising 2.6 percent and 2.8 percent, respectively.

A 1.8 percent decrease in prices for nonagricultural industrial supplies and materials drove the October decline in nonagricultural prices. The drop in nonagricultural industrial supplies and materials prices, which followed a 1.2 percent decrease in September, was the largest monthly decline for the index in 11 months. A drop in fuel prices was the biggest reason for the decline, but lower metals and chemical prices were also contributing factors.

In contrast, prices for each of the major finished goods areas either rose or were unchanged in October. Capital goods prices and prices for automotive vehicles increased 0.2 percent and 0.1 percent, respectively, while the price index for consumer goods recorded no change for the month. "

Click here to view the full Labor Department report.

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