Import prices fell 3.7 percent in August, the first decrease since December 2007 and the largest one-month decline since the index was first published monthly in December 1988. Despite the drop, import prices rose 16.0 percent over the past year. The August decrease in import prices was led by a 12.8 percent decline in petroleum prices, the largest monthly drop since an 18.8 percent decline in April 2003. The August decline in petroleum prices followed a revised 1.0 percent decrease in July; however the index still rose 52.0 percent over the past 12 months. Nonpetroleum import prices declined 0.3 percent in August after a 0.7 percent increase the previous month. The August decrease was driven by a 16.4 percent downturn in natural gas prices. Overall nonpetroleum prices rose 7.5 percent for the year ended in August.
Excluding all fuels, import prices ticked up 0.2 percent in August. Rising prices for nonfuel industrial supplies and materials; foods, feeds, and beverages; and automotive vehicles all contributed to the modest increase. Nonfuel industrial supplies and materials prices advanced 0.4 percent in August as higher chemical prices offset declining prices for unfinished metals. A 0.7 percent increase in foods, feeds, and beverages largely resulted from elevated prices for meat, fish, and fruit. A 0.1 percent up-tick in the price index for automotive vehicles also contributed to the increase in nonfuel import prices.
Capital goods prices declined in August while prices for consumer goods were unchanged. The 0.1 percent decrease in capital goods prices was led by computer prices which continued to trend down in August. The fall in computer prices more than offset a 0.2 percent advance in capital goods prices excluding computers.
Export Goods
Export prices, down 1.7 percent in August, fell for the first time since October 2006. The August decline was mostly led by a 9.6 percent drop in agricultural prices, although nonagricultural prices also fell, decreasing 0.7 percent. Despite the downturn, export prices rose 8.2 percent for the year ended in August. The decline in agricultural prices in August followed a 6.5 percent advance in July, and was the largest one-month drop since the index was first published monthly in December 1988. The August decline was led by sharp decreases in corn, soybeans, and wheat prices, all of which remained up over the past 12-months. The price index for overall agricultural exports rose 24.8 percent over the same period. The August decrease in nonagricultural prices was the first monthly decline since July 2007 and the index advanced 6.7 percent over the past year.
The August decrease in nonagricultural prices resulted from a 2.5 percent downturn in the price index for nonagricultural industrial supplies and materials which last recorded a monthly drop in September 2007. Decreasing prices for fuel led the decline.
In contrast, prices for each of the major finished goods categories increased in August. Consumer goods prices rose 0.3 percent for the second consecutive month. The price indexes for capital goods and for automotive vehicles each rose 0.1 percent. Excluding a 0.5 percent decrease in computer prices, prices for capital goods excluding computers advanced 0.3 percent in August.
Imports by Locality of Origin
Lower fuel prices impacted the import price indexes from Canada, Mexico, and the European Union in August. Import prices from Canada fell 3.8 percent, the largest one-month drop since a 4.4 percent decrease in October 2006. Prices for imports from Mexico declined 3.2 percent while import prices from the European Union fell 0.8 percent. Despite the August decreases, prices for imports from Canada, Mexico, and the European Union rose 21.4 percent, 16.7 percent, and 9.2 percent respectively over the past 12 months.
Prices for imports from Japan also declined in August, edging down 0.1 percent, which was the first monthly downturn for the index since November 2007. The index rose 1.8 percent over the past year.
In contrast, import prices from China continued to rise in August, ticking up a modest 0.1 percent after rising 2.1 percent over the previous three months. Import prices from China increased 4.9 percent for the year ended in August.
Import and Export Services
Import air passenger fares fell 3.0 percent in August after rising 4.1 percent and 18.3 percent, respectively, in July and June. The August downturn was led by a 5.7 percent decrease in Asian fares. The index for import air passenger fares increased 15.8 percent for the August 2007-2008 period. Export air passenger fares rose 5.3 percent in August and 19.8 percent over the past year. The August increase was driven by a 16.1 percent jump in Asian fares.
The price index for import air freight edged down 0.2 percent in August as a 1.7 percent decline in Asian air freight prices offset a 1.6 percent increase in European air freight prices. The August downturn in overall import air freight prices followed a 2.6 percent increase the previous month. In contrast, export air freight prices rose 3.6 percent in August after advancing 1.6 percent in July. Import air freight prices rose 21.5 percent over the past 12 months while export air freight prices advanced 25.4 percent over the same period.
