Import prices fell 4.7 percent in October after decreases of 3.3 percent and 3.0 percent in September and August, three of the four largest monthly declines for the index since being published monthly for the first time in December 1988. Despite falling 10.6 percent over the past three months, import prices increased 6.7 percent for the year ended in October. The three-month decline in import prices was largely driven by falling petroleum prices which plunged 16.7 percent in October after decreasing 10.2 percent and 9.7 percent, respectively, in September and August. The October drop in petroleum prices was the largest monthly decline since an 18.8 percent fall in April 2003 and the 32.4 percent decrease over the past three months is the largest quarterly decline since the three months ended in February 1991. For the October 2007-2008 period, however petroleum prices rose 13.1 percent.
The price index for nonpetroleum imports fell 0.9 percent for the second consecutive month in October, although the index increased 5.0 percent over the past year. The October decrease was led by a 3.2 percent decline in prices for nonpetroleum industrial supplies and materials, the largest one-month drop for that index since a 5.3 percent decrease in April 2003. Lower prices for metals and natural gas were the major factors for the October decline in nonpetroleum industrial supplies and materials prices. Lower prices for foods, feeds, and beverages and capital goods, down 1.6 percent and 0.2 percent, respectively, also contributed to the decrease in nonpetroleum prices.
In contrast, the price indexes for consumer goods and automotive vehicles each ticked up 0.1 percent in October.
Export Goods
Export prices fell 1.9 percent in October, the largest one-month decline since the index was first published monthly in December 1988. The decrease followed drops of 0.8 percent in September and 1.6 percent in August and the 4.3 percent decrease over the past three months was the largest quarterly decline since the index was first published in September 1983. Despite the recent downward trend, export prices advanced 4.2 percent over the past 12 months. The price index for agricultural exports fell 8.7 percent in October, the second decline in the past three months. The October drop was led by falling prices for soybeans, corn, and wheat. Agricultural prices rose 5.7 percent for the year ended in October.
Nonagricultural prices fell for the third consecutive month, declining 1.2 percent in October following decreases of 0.9 percent and 0.7 percent, respectively, in September and August. The October decline was the largest one-month drop for the index since first being published monthly in December 1988 and was led by a 3.8 percent drop in prices for nonagricultural industrial supplies and materials. That decline was driven by lower prices for fuels, metals, and chemicals. The price index for nonagricultural exports increased 4.0 percent over the past year.
Most of the major finished goods price indexes advanced in October. Consumer goods prices rose 0.5 percent for the month and increased 3.2 percent over the past 12 months. The price index for automotive vehicles advanced 0.4 percent, an increase that was partially attributable to year-end model changeovers. Capital goods prices, in contrast, declined in October, edging down 0.1 percent, a decrease that resulted from a 1.8 percent drop in computer prices. Excluding computer prices, capital goods prices increased 0.3 percent.
Imports by Locality of Origin
The sharp decline in fuel prices continued to impact import prices from Canada, the European Union, and Mexico in October. Prices for imports from Canada fell 4.4 percent for the second consecutive month and decreased 11.4 percent over the past three months, which was the largest quarterly drop since the index was first published in December 1990. The price index for imports from the European Union also fell for the third month in a row, decreasing 1.3 percent in October after dropping 1.1 percent and 0.7 percent, respectively, in September and August. Import prices from Mexico decreased 4.9 percent in October, the largest monthly drop since the index was first published in December 2003, and the October decrease followed declines of 2.4 percent and 2.5 percent the two previous months. Despite the declines, the price indexes for imports from Canada, the European Union, and Mexico increased 12.7 percent, 6.3 percent, and 7.6 percent, respectively, over the past 12 months.
The price index for imports from China declined for the first time since January 2007, falling 0.3 percent in October. Previous to the downturn, prices for imports from China were unchanged in September and ticked up 0.2 percent in August. The index rose 4.2 percent for the year ended in October.
Import prices from Japan rose 0.5 percent in October following a 0.6 percent decline the previous month. The index advanced 1.5 percent for the October 2007-2008 period.
Import and Export Services
Import air passenger fares rose 2.9 percent in October after declining 6.9 percent and 3.0 percent, respectively, over the previous two months. The October increase was led by a 4.1 percent advance in European fares. In contrast, export air passenger fares declined for the second consecutive month, falling 3.1 percent in October after a 9.9 percent drop in September. For the year ended in October, import air passenger fares rose 25.3 percent while export air passenger fares advanced 8.8 percent.
Prices for import air freight declined 3.1 percent in October after decreasing 3.4 percent the previous month. Despite the recent declines, the index increased 12.3 percent over the past 12 months. A 5.1 percent drop in European air freight prices in October led the overall decline. The price index for export air freight fell 1.2 percent in October; however the index advanced 18.0 percent over the past year.
