U.S. Import and Export Price Indexes for December, 2006

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

Import Prices
Predicted: 0.5
Actual: +1.1%

Export Prices
Actual: +0.7%

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 indexes 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

Import prices rose for the second consecutive month in December and the 1.1 percent increase was the largest monthly advance since May. The price index for overall imports also increased for the fifth straight year in 2006, advancing 2.5 percent after more substantial increases of 8.0 percent and 6.7 percent in 2005 and 2004, respectively.

A 4.8 percent increase in petroleum prices was the largest contributor to the overall December rise. Petroleum prices resumed their upward trend after declining 21.5 percent for the three-month period ended in November. The index rose 6.2 percent overall in 2006, the fifth consecutive year the index advanced, but the smallest annual increase over that period.

Nonpetroleum prices increased 0.4 percent in December after a 0.9 percent advance the previous month. Prices for nonpetroleum imports rose 1.7 percent over the past 12 months after advancing 2.4 percent and 3.7 percent in 2005 and 2004, respectively. The December increase in nonpetroleum prices was driven by a 1.5 percent rise in nonpetroleum industrial supplies and materials prices. That advance in turn was led by higher prices for natural gas, up for the second consecutive month, metals and chemicals prices. The price index for nonpetroleum industrial supplies and materials increased 4.5 percent over the past year.

The price indexes for consumer goods, capital goods, and foods, feeds, and beverages also contributed to the higher prices for nonpetroleum imports in December. Consumer goods prices rose 0.2 percent in December and 1.2 percent for the year ended in December. Prices for capital goods edged up 0.1 percent after remaining unchanged over the previous four months. Overall, the index increased a modest 0.4 percent in 2006. Foods, feeds, and beverages prices rose 0.6 percent for the month and 4.1 percent for the December 2005-2006 period.

In contrast, prices for automotive vehicles decreased 0.1 percent in December, the first downturn for the index since a 0.2 percent drop in January. Despite the December decline, automotive vehicle prices rose 0.6 percent over the past 12 months.

Export Goods

Export prices increased 0.7 percent in December as higher prices for both agricultural and nonagricultural exports contributed to the rise. The advance in the prices for overall exports followed a 0.4 percent rise in November and was the largest monthly gain since a similar 0.7 percent increase in June. Prices for overall exports rose 4.6 percent in 2006, the largest annual increase for the index since a 6.2 percent jump in 1988. The 2006 rise followed a 2.8 percent advance the previous year.

Both the December and annual increases in overall export prices were partly driven by higher prices for agricultural exports, which rose 2.2 percent in December, led primarily by higher corn prices. The price index for export corn increased 5.2 percent in December after a 20.7 percent jump in November. For the year ended in December, agricultural prices rose 13.2 percent compared to a 4.9 percent increase in 2005.

Nonagricultural prices also increased in December, rising 0.5 percent. The index rose 3.8 percent over the past 12 months. A 1.6 percent advance in nonagricultural industrial supplies and materials prices led the December increase. Higher prices for fuels, metals, and selected building materials all contributed to that advance. For the year ended in December, nonagricultural industrial supplies and materials prices rose 9.8 percent.

Prices for each of the major finished goods areas also increased in December. Capital goods prices ticked up 0.1 percent, the fourth consecutive monthly advance. The index rose 1.2 percent over the past 12 months. Automotive vehicle prices increased 0.3 percent, the largest one-month advance since October 2005. Prices for automotive vehicles rose 1.5 percent for the year ended in December. The price index for consumer goods advanced 0.1 percent for the month and 2.1 percent over 2006."

Click here to view the full Labor Department report.

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