The decline in import prices in August was the first since a 1.2 percent drop in January. A comparatively modest 1.3 percent decrease in petroleum prices followed six months of higher prices during which the index rose 34.9 percent. Nonpetroleum prices also decreased in August, falling 0.1 percent. The modest decline was the first downturn for this index since a 0.1 percent drop in January. Excluding a 12.9 percent drop in natural gas prices, however, nonfuel import prices rose 0.2 percent in August. Nonpetroleum prices rose 2.3 percent for the year ended in August, while overall import prices increased 1.9 percent for the same period.
The August downturn in nonpetroleum prices was driven by a 1.0 percent decline in nonpetroleum industrial supplies and materials prices. The drop in natural gas prices more than offset higher metals prices. Despite the August drop, the price index for nonpetroleum industrial supplies and materials prices rose 6.0 percent over the past 12 months.
Each of the major finished goods areas rose 0.2 percent in August. The increase in consumer goods prices followed a similar 0.2 percent advance in July and was led by modest price increases for medicinal, dental, and pharmaceutical materials and home entertainment equipment. The price index for capital goods rose 0.2 percent for the fourth consecutive month, and in August an upturn in computer prices contributed to the advance. Automotive vehicle prices also rose 0.2 percent in August after 0.1 percent increases in each of the prior four months.
Higher foods, feeds, and beverages prices also helped to offset lower fuel prices in August, increasing 0.7 percent for the month.
Export Goods
Prices for overall exports resumed an upward trend in August, rising 0.2 percent after a modest 0.1 percent downturn in July. The price indexes for both agricultural goods and nonagricultural goods contributed to the August advance, increasing 1.0 percent and 0.1 percent, respectively. The rise in agricultural prices followed increases of 1.4 percent in July and 2.7 percent in June. Higher prices for wheat, meat, and fish all factored into the August increase. Agricultural prices rose 17.6 percent over the past year. Nonagricultural prices ticked up 0.1 percent in August after a 0.2 percent decline the previous month and advanced 2.4 percent for the year ended in August. Overall exports rose 3.6 percent for the same period.
The price indexes for capital goods, consumer goods, and automotive vehicles all increased 0.1 percent in August. Each of those indexes has trended up for the past 12 months, rising 1.5 percent, 2.2 percent, and 1.1 percent, respectively over that period.
Prices for nonagricultural industrial supplies and materials also contributed to the increase in nonagricultural goods prices, rising 0.1 percent. That increase followed a 1.0 percent decline in July and was largely led by rising prices for chemicals and some metals which mostly offset declining prices for fuel and steelmaking materials.
Imports by Locality of Origin
Import prices from China rose 0.3 percent in August, the fourth consecutive month that the index has risen by at least that magnitude. Prior to May, the index had not risen by more than 0.2 percent since publication began in December 2003. Prices of imports from China increased 1.1 percent for the year ended in August.
The price indexes for imports from Mexico and the European Union also advanced in August, rising 0.7 percent and 0.1 percent, respectively. Import prices from Mexico increased 3.6 percent over the past year, while prices of imports from the European Union rose 2.1 percent for the same period.
In contrast, import prices from Canada fell 0.5 percent in August because of lower fuel prices, while prices of imports from Japan were
unchanged. Despite the August downturn, the price index for imports from Canada advanced 2.1 percent over the past 12 months. Prices for imports from Japan fell 0.7 percent for the August 2006-2007 period.
Import and Export Services
The price index for export travel and tourism, which is lagged one month, declined 1.3 percent in July after a 0.2 percent drop in June.
Import air passenger fares increased for the sixth consecutive month, ticking up 0.1 percent in August. Higher European and Latin American/Caribbean fares more than offset a 2.0 percent decline in Asian fares. The price index for import air passenger fares rose 8.2 percent for the year ended in August. Export air passenger fares also increased in August, advancing 3.4 percent after a 5.1 percent gain in July. The index rose 3.9 percent over the past 12 months.
The price indexes for import air freight and export air freight each increased in August, rising 1.4 percent and 0.3 percent, respectively. Higher air freight prices to and from Europe led the increases. Import air freight prices advanced 1.3 percent over the past year, while over the same period, export air freight prices rose 1.5 percent.
