Fuel Prices Drive Drop in U.S Import Prices in August

U.S. import prices decreased 0.5% in August, the U.S. Bureau of Labor Statistics reported today, after rising 0.1% the previous month. The August decline was driven by a drop in fuel prices; prices for nonfuel goods were unchanged. Prices for U.S. exports fell 0.6% in August following a 0.2% increase in July.

Imports

Prices for U.S. imports fell 0.5% in August following a 0.1% increase in July and a 1.1% decline in June. With the exception of the August and June decreases, U.S. import prices advanced in each month of 2019. Despite the increases, the price index for U.S. imports declined 2.0% from August 2018 to August 2019. See the chart here.

Fuel Imports: Import fuel prices decreased 4.3% in August, after rising 0.7% the previous month. Prices for import fuel fell 11.1 percent over the past three months. In August, lower petroleum prices more than offset higher prices for natural gas. The price index for import petroleum declined 4.8%, after increasing 0.9% the previous month. Fuel prices decreased 8.7% over the past 12 months; prices for import petroleum fell 9.6% over the same period. The price index for natural gas imports rose 16.0% in August, after declines in each of the previous four months. Despite the August increase, natural gas prices fell 6.1% over the past year.

All Imports Excluding Fuel: Prices for nonfuel imports were unchanged for the second consecutive month in August following 0.3% decreases in both June and May. In August, lower prices for foods, feeds, and beverages and nonfuel industrial supplies and materials were offset by price increases for automotive vehicles and consumer goods. Prices for nonfuel imports declined 1.0% over the past 12 months, led by price decreases for industrial supplies and materials and capital goods.

Nonfuel Industrial Supplies and Materials: The price index for non-fuel industrial supplies and materials fell 0.3% in August, after ticking up 0.1% in July. The August drop was driven by decreases in prices for chemicals, textiles, and lumber, which more than offset higher unfinished metals prices.

Finished Goods: Finished goods prices were mostly up in August. Consumer goods prices ticked up 0.1% following a 0.2% advance in July. Prices for automotive vehicles ticked up 0.1% following a 0.2% drop the previous month. The price index for capital goods was unchanged for the second consecutive month in August. Lower computer accessories, peripherals, and semiconductors prices offset higher prices for telecommunications equipment.

Foods, Feeds, and Beverages: Import foods, feeds, and beverages prices fell 0.3% in August, after a 0.5% drop in July. The August decrease was driven by a 9.4% decline in fruit prices.

Exports

Prices for U.S. exports decreased 0.6% in August, after a 0.2% rise the previous month. The decline was driven by price decreases for both agricultural and non-agricultural exports. The price index for U.S. exports also fell on a 12-month basis in August, declining 1.4% from August 2018 to August 2019. See the chart here.

Agricultural Exports: The price index for agricultural exports declined 2.5% in August, after increases of 0.2% in July and 2.4% in June. The decrease in August was the largest monthly decline since the index fell 5.2% in July 2018. Lower prices for vegetables, corn, soybeans, cotton, meat, and wheat all contributed to the decline. Despite the monthly drop, prices for agricultural exports rose 0.5% over the past year.

All Exports Excluding Agriculture: Nonagricultural export prices fell 0.4% in August following a 0.2% increase in July. The August decrease was driven by price declines for nonagricultural industrial supplies and materials and automotive vehicles. The price indexes for consumer goods and capital goods both were unchanged in August. Prices for nonagricultural exports fell 1.6% for the year ended in August; lower prices for non-agricultural industrial supplies and materials more than offset price increases for finished goods over the 12-month period.

Nonagricultural Industrial Supplies and Materials: Nonagricultural industrial supplies and materials prices decreased 1.1% in August, after rising 0.8% the previous month. A 3.5% drop in export fuel prices drove the monthly decline, more than offsetting higher nonferrous metals prices.

Finished Goods: Export finished goods prices were mostly unchanged in August. Automotive vehicles prices fell 0.2% led by lower prices for nonengine parts and accessories. Prices for capital goods were unchanged for the month. Lower electrical generating equipment prices were offset by price increases for transportation equipment. The price index for consumer goods also was unchanged in August.

Measures of Import and Export Prices by Locality

Imports by Locality of Origin: Prices for imports from China edged down 0.1% in August following decreases of 0.2% in both July and June. Import prices from China have not advanced on a monthly basis since ticking up 0.1% in May 2018. The price index for imports from China fell 1.6% for the year ended in August. Import prices from Japan increased 0.2% in August, after being unchanged for each of the previous four months. The last time the index rose more than 0.2% was a 0.5% advance in January 2018. Prices for imports from Japan increased 0.2 percent over the past year. Import prices from the European Union fell 0.2% in August and 0.3% over the past 12 months. The price index for imports from Mexico declined 0.1% in August, after a 0.2% rise in July. Import prices from Canada fell 1.4% in August, after decreasing 4.8% for the three months ended in July. Despite the drops, prices for imports from Canada rose 1.1%  over the past year. Read the chart here.

Exports by Locality of Destination: Export prices to China declined 1.6% in August, after advancing 0.2% in July. Prices for exports to China fell 3.1% over the past 12 months. Export prices to Japan decreased 0.6% in August, after increasing 1.0% in July and ticking up 0.1% in June. Export prices to the European Union declined 0.2% in August following a 0.8% increase the previous month. The price indexes for exports to Canada and Mexico each decreased 0.8%  in August. See the chart here.

Terms of Trade Indexes: Terms of Trade indexes are based on country, region, or grouping and measure the change in the purchasing power of exports relative to imports. The U.S. terms of trade with China decreased 1.5% in August, the largest decline since the index fell 1.7% in September 2018. Lower export prices to China drove the monthly decrease in August. U.S. terms of trade with China dropped 1.5% over the past 12 months. The U.S. terms of trade with Japan declined 0.8% in August following a 0.9% increase the previous month. U.S. terms of trade with Japan fell 0.5% from August 2018 to August 2019. The index for U.S. terms of trade with the European Union was unchanged in August, after advancing 0.6% in July. The U.S. terms of trade with Mexico declined 0.7% in August and 1.9% over the past year. U.S. terms of trade with Canada rose 0.6% in August and declined 0.7% over the past 12 months. Read the chart here.

Import and Export Services

Imports: Import air passenger fares fell 8.2% in August following a 9.9% drop in July and a 6.7% advance in June. In August, lower European, Asian, and Latin American/Caribbean fares all contributed to the monthly decline. Import air passenger fares decreased 6.1% from August 2018 to August 2019. The price index for import air freight declined 0.7% in August, after dropping 2.5% the previous month. Import air freight prices fell 7.6% over the past year. See the chart here.

Exports: Export air passenger fares decreased 3.1% in August following a 3.3% rise in July. Lower European and Latin American/Caribbean fares more than offset higher Asian fares in August. The index for export air passenger fares fell 0.8% over the past 12 months. Export air freight prices declined 1.2% in August, the largest monthly drop since the index decreased 6.2% in December 2017. Despite the August decline, prices for export air freight rose 0.4% over the past year.

Import and Export Price Index data for September are scheduled for release on Oct. 11.