Import prices fell 4.2 percent in December and have fallen 21.7 percent overall since July. Continued lower prices for both petroleum and nonpetroleum prices in December contributed to the decrease. Overall, import prices fell 9.3 percent in 2008, the first year the index declined since a 9.1 percent drop in 2001. The 2008 decrease was also the largest calendar year decline since the index was first published in 1982.
Petroleum prices fell sharply for the fifth consecutive month, decreasing 21.4 percent in December after falling 55.5 percent over the previous four months. Despite increasing 51.6 percent over the first seven months of 2008, petroleum prices finished the year down 47.0 percent for the December 2007-2008 period. That decline was the largest calendar year decrease since the index was first published in 1982 and followed a 48.1 percent increase in 2007.
Nonpetroleum prices also decreased for the fifth consecutive month in December and the index declined 4.9 percent overall since July. In December, the index fell 1.1 percent after a 1.8 percent decrease in November.
The December decline in nonpetroleum prices was primarily led by a second consecutive 5.1
percent decrease in the price index for nonpetroleum industrial supplies and materials. Falling prices for unfinished metals and chemicals were the largest contributors to the declines in each of the past two months. Nonpetroleum industrial supplies and materials prices fell 1.1 percent over the past year, led primarily by declining metals prices.
Capital goods prices and prices for automotive vehicles also contributed to the December decrease in nonpetroleum prices, falling 0.3 percent and 0.2 percent, respectively. Despite the declines, both indexes rose over the past year. Capital goods prices increased 0.3 percent in 2008, while prices for automotive vehicles advanced 0.7 percent.
In contrast, the price indexes for foods, feeds, and beverages and consumer goods prices both rose in December, increasing 2.3 percent and 0.1 percent, respectively. The December advance in foods, feeds, and beverages prices was driven by higher prices for vegetables and fruit, which more than offset lower meat prices. Foods, feeds, and beverages prices rose 5.7 percent for the 2008 calendar year, while the price index of import consumer goods increased 2.2 percent.
Export Goods
Export prices fell 2.3 percent as both agricultural and nonagricultural prices declined in December. Prices for exports were down 7.5 percent in the last quarter of 2008, the largest three-month decrease since the index was first published in 1983. Export prices declined 3.2 percent in 2008, the first calendar year drop since 2001 and the largest since 1998.
Agricultural products fell for the third consecutive month, decreasing 6.5 percent in December after a 7.3 percent drop the previous month. Falling prices for corn, soybeans, meat, and wheat were the largest factors leading the December decline. The price index for agricultural exports fell 11.6 percent in 2008, the largest calendar year decrease since the index was first published in 1985, following an increase of 23.3 percent in 2007 which was the largest calendar year increase since the index was first published.
Nonagricultural prices declined 1.9 percent in December and 2.3 percent in 2008. The annual decrease was the first calendar year drop for the index since 2001. In December, the decrease was led by a 6.0 percent decline in the price index for nonagricultural industrial supplies and materials. Lower prices for fuels, metals, and chemicals all contributed to the decrease. Nonagricultural industrial supplies and materials prices fell 9.6 percent for the December 2007-2008 period.
Prices for each of the major finished goods categories also decreased in December, although the indexes all rose overall in 2008. Capital goods prices and prices for automotive vehicles both declined 0.2 percent in December,while the price index for consumer goods fell 0.3 percent. In 2008, capital goods prices rose 0.7 percent, automotive vehicle prices 1.2 percent, and consumer goods prices 1.1 percent.
Imports by Locality of Origin
Prices of imports from China fell 0.4 percent in December after a 0.5 percent decline in November. Despite the recent decreases, import prices from China advanced 3.1 percent in 2008 after rising 2.4 percent in 2007, the first calendar year increase for the index which was first published in 2003.
Import prices from Canada fell for the fifth consecutive month, declining 3.2 percent in December following a 7.2 percent drop the previous month. Falling fuel prices continued to lead the decrease. The index fell 5.6 percent in 2008, the largest calendar year decline since an 11.7 percent drop in 2001. The price index for imports from the European Union also decreased for the fifth consecutive month in December, falling 1.7 percent. Despite the recent declines, the index ticked up 0.2 percent over the past year.
In contrast, prices of imports from Japan and from Mexico each rose in December, increasing 0.2 percent and 0.5 percent, respectively. The price index for imports from Japan increased 1.8 percent in 2008, the largest calendar year advance since the index rose 2.8 percent in 1995. Import prices from Mexico fell 5.0 percent in 2008, led by lower petroleum prices.
Import and Export Services
Import air passenger fares edged down 0.3 percent in December after a 5.0 percent decline in November. The December decrease was driven by a 10.2 percent drop in European fares which more than offset rising prices for Asian and Latin American/Caribbean fares. The index of import air passenger fares increased 16.2 percent overall for the December 2007-2008 period. In contrast, export air passenger fares advanced 0.8 percent in December as a 3.8 percent increase in Asian fares and a 3.0 percent rise in Latin American/Caribbean fares more than offset a 2.5 percent fall in European fares. Export air passenger fares rose 2.7 percent over the past 12 months.
The price index of import air freight declined 1.8 percent in December, led by a 6.8 percent decrease in European air freight prices. The drop followed decreases of 4.1 percent, 3.3 percent, and 3.2 percent, respectively, over the previous three months. Despite those declines, the index advanced 0.8 percent in 2008. Export air freight prices fell 2.7 percent in December, the fourth consecutive monthly decline for the index. However, for the year ended in December, export air freight prices rose 6.8 percent.
