The 1.8 percent rise in import prices in October was the largest monthly increase since a similar change in May 2006. The advance followed a 0.8 percent rise in September as the increase during the past two months continued the upward trend over most of 2007 after a 0.4 percent downturn in August. The 6.9 percent increase in petroleum prices was the largest contributor to the October increase, although nonpetroleum prices also advanced, rising 0.5 percent. Petroleum prices continued an upward trend over the past year, rising 41.4 percent for the 12 months ended in October. The increase in nonpetroleum prices in October followed a 0.2 percent decline in September. Nonpetroleum prices advanced 3.2 percent over the past year while the price index for overall imports rose 9.6 percent for the same period.
A 1.5 percent increase in the price index for nonpetroleum industrial supplies and materials was the largest contributor to the overall rise in nonpetroleum prices in October. The advance followed declines in each of the three prior months. In October, higher prices for natural gas, chemicals, and some metals more than offset decreasing prices for building materials.
The price indexes for automotive vehicles and consumer goods also rose in October. The 0.4 percent advance in automotive vehicle prices was the largest increase since a 0.7 percent jump in October 2003 and was driven by higher prices for passenger automobiles and parts. The increase in passenger automobile prices was partially due to year-end model changeovers. Prices for consumer goods ticked up 0.1 percent for the third consecutive month.
In contrast, capital goods prices edged down 0.1 percent in October, the first monthly drop for the index since April. The decline was led by a 0.9 percent decrease in computer prices. Excluding computers, prices for capital goods increased 0.2 percent.
Export Goods
The 0.9 percent increase in export prices was the largest one-month gain in the index since a 1.0 percent increase in April 1995. Higher prices for both agricultural and nonagricultural exports contributed to the advance. Agricultural prices increased 3.9 percent in October after a 4.1 percent rise the previous month and advanced 26.8 percent over the past year. The October increase was driven by a sharp rise in wheat prices, which rose 18.9 percent following a 22.0 percent increase in September. Higher prices for soybeans, vegetables, and corn also contributed to the overall advance in agricultural prices. Nonagricultural prices increased 0.5 percent in October after recording a 0.1 percent decline the previous month. For the year ended in October, nonagricultural prices rose 3.9 percent while overall export prices advanced 5.6 percent.
The October increase in nonagricultural prices was led by a 1.2 percent rise in the price index for nonagricultural industrial supplies and materials. The advance followed a 0.3 percent downturn in September. Rising prices for fuel, metals, and chemicals were the main contributors to the October increase.
Each of the major finished goods indexes also recorded advances in October. The price indexes for consumer goods and capital goods rose 0.4 percent and 0.2 percent, respectively. Automotive vehicle prices increased 0.3 percent in October, which was mostly attributable to year-end model changeovers.
Imports by Locality of Origin
Prices for imports from China rose for the sixth consecutive month in October, increasing 0.3 percent. The index had risen 0.1 percent in September following 0.4 percent increases in July and August. The index rose 2.2 percent over the past 12 months after declining 1.4 percent for the October 2005-2006 period.
Import prices from Canada and from the European Union advanced 1.8 percent and 0.6 percent, respectively, in October. Higher fuel prices and a decline in the value of the dollar contributed to the increases. For the year ended in October, prices for imports from Canada rose 11.4 percent while import prices from the European Union were up 2.4 percent.
The price indexes for imports from Mexico and from Japan also increased in October, rising 2.5 percent and 0.1 percent, respectively. Higher petroleum prices led the advance in prices for imports from Mexico, which rose 12.6 percent over the past year. In contrast, import prices from Japan declined 0.2 percent over the same period.
Import and Export Services
The price index for export travel and tourism, which is lagged one month, increased 2.1 percent in September after a 0.4 percent advance in August.
Import air passenger fares decreased for the second consecutive month in October, falling 5.6 percent following a 6.3 percent drop in September. The decline in October was driven by lower seasonal European fares, which declined 12.7 percent. Despite the recent drops, the index rose 5.5 percent over the past 12 months. Export air passenger fares fell 0.6 percent in October, but advanced 10.0 percent over the past year.
The price indexes for import air freight and export air freight each rose in October, advancing 0.8 percent and 0.9 percent, respectively. Import air freight prices increased 1.7 percent for the year ended in October, while prices for export air freight rose 2.8 percent.
