Import Prices up 0.9% in August on Higher Fuel and Nonfuel Prices; Export Prices up 0.5%

U.S. import prices rose 0.9% in August, the U.S. Bureau of Labor Statistics reported today, following advances of 1.2% in July and 1.4% in June. Higher prices for both fuel and nonfuel imports contributed to the August increase. Prices for U.S. exports also advanced in August, rising 0.5%, after increasing 0.9% the previous month.

Imports
Prices for U.S. imports advanced 0.9% in August, after rising 3.3% from April to July. Prior to that, import prices decreased 5.6% from January to April. Despite the recent increases, U.S. import prices declined 1.4% for the year ended in August.

Fuel Imports: The price index for import fuel rose 3.3% in August following increases of 15.1% in July, 21.3% in June, and 13.9% in May. In August, higher prices for both petroleum and natural gas contributed to the advance. Petroleum prices increased 2.9% in August, after rising 63.3% from April to July. The price index for natural gas advanced 12.2% in August following a 9.1% drop the previous month. Despite the increases in each of the past four months, import fuel prices fell 22.2% from August 2019 to August 2020. Prices for petroleum declined 24.1% and natural gas prices increased 53.0% over the past year.

All Imports Excluding Fuel: Nonfuel import prices rose 0.7% in August, after increasing 0.2% in July and 0.3% in June. The August advance was the largest monthly increase since a 0.8% rise in April 2011. In August, the increase was driven by a 3.6% advance in nonfuel industrial supplies and materials prices. The price index for nonfuel imports rose 0.8% from August 2019 to August 2020.

Nonfuel Industrial Supplies and Materials: The price index for nonfuel industrial supplies and materials rose 3.6% in August, the largest 1-month advance since the index was first published in December 2001. The August increase was led by higher prices for unfinished metals and selected building materials.

Finished Goods: Prices for each of the major finished goods categories increased in August. Consumer goods prices rose 0.2%, after advancing 0.3% in July. The August increase was driven by higher prices for coins, gems, jewelry, and collectibles. Prices for capital goods and automotive vehicles each ticked up 0.1% in August.

Foods, Feeds, and Beverages: Foods, feeds, and beverages prices advanced 0.4% in August following declines of 0.9% in July and 0.4% in June. The increase in August was led by rising prices for meat, food oils and oilseeds, and vegetables.

Exports
The price index for U.S. exports increased 0.5% in August, after advancing 0.9% in July and 1.8% in June. In August, rising nonagricultural prices more than offset falling agricultural prices. U.S. export prices declined 2.8% over the past 12 months, the smallest over-the-year decrease since February 2020.

Agricultural Exports: Prices for agricultural exports declined 2.2% in August following consecutive 1.6% increases in July and June. In August, declining prices for vegetables, corn, and dairy products, which fell 11.8%, 7.1%, and 9.9%, respectively, drove the drop in agricultural prices. Export agricultural prices also fell over the past year, decreasing 2.9% led by a 16.1% drop in corn prices, a 24.4% fall in nut prices, and a 5.0% decline in meat prices.

All Exports Excluding Agriculture: Nonagricultural export prices advanced 0.8% in August, after increasing 0.9% in July and 1.7% in June. The August rise was primarily led by higher nonagricultural industrial supplies and materials prices; rising prices for consumer goods, capital goods, and nonagricultural foods also contributed to the increase. The price index for nonagricultural exports decreased 2.8% for the year ended in August. Lower prices for nonagricultural industrial supplies and materials, consumer goods, nonagricultural foods, and automotive vehicles more than offset higher capital goods prices.

Nonagricultural Industrial Supplies and Materials: The price index for nonagricultural industrial supplies and materials increased 2.3% in August following advances of 2.2% in July and 6.1% in June. The August rise was driven by higher prices for nonferrous metals, chemicals, and fuel.

Finished Goods: Finished goods prices were mostly up in August. Prices for export consumer goods rose 0.3%, after increasing 0.2% in July. The August advance was the largest one-month rise since a 0.3% increase in July 2019 and was led by a 0.3% advance in medicinal, pharmaceutical, and dental materials prices. The price index for export capital goods rose 0.1% in August following a 0.3% increase the previous month. Automotive vehicles prices were unchanged in August.

Measures of Import and Export Prices by Locality

Imports by Locality of Origin: The price index for imports from China was unchanged in August following a 0.2% advance the previous month. Prices for imports from China declined 0.3% over the past 12 months. Import prices from Japan were unchanged for the second consecutive month in August. The price index for imports from Japan decreased 0.2% for the year ended in August. Prices for imports from Canada increased 3.3% in August, after advancing 20.1% from April to July. Despite the recent increases, import prices from Canada fell 4.6% for the year ended in August. The price indexes for imports from Mexico and the European Union also rose in August, increasing 0.9% and 0.4%, respectively.

Exports by Locality of Destination: Export prices to China advanced 0.8% in August, after rising 1.3% the previous month. Prices for exports to China were unchanged over the past year. The price index for exports to Japan increased 0.6% for the second consecutive month in August following a 4.4% advance in June. Despite the recent increases, export prices to Japan decreased 2.1% from August 2019 to August 2020. Prices for exports to Canada rose 0.7% in August, after advances of 1.3% in July and 1.6% in June. The price index for exports to Canada declined 1.9% over the past 12 months. Export prices to Mexico and the European Union also increased in August, rising 0.5% and 0.2%, respectively.

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 index for U.S. terms of trade with China advanced 0.8% in August, after rising 5.2% from April to July, the largest three-month advance since the index was first published in December 2017. The U.S. terms of trade with Japan rose 0.6% for the second consecutive month in August following a 4.% increase in June. In contrast, the index for U.S. terms of trade with Canada fell 2.5% in August, after declining 14.2% from April to July. In August, higher import prices from Canada more than offset increasing export prices to Canada. The U.S. terms of trade with Mexico and the European Union also decreased in August, declining 0.4% and 0.2%, respectively.

Import and Export Services

Imports: Import air passenger fares ticked up 0.1% in August, after falling 4.0% in July and rising 7.0% in June. In August, rising prices for Asian fares more than offset lower European and Latin American/Caribbean fares. Import air passenger fares declined 8.9% over the past 12 months. The price index for import air freight advanced 1.8% in August following a 14.0% drop in July and a 3.1% decrease in June. Import air freight prices rose 55.8% from August 2019 to August 2020.

Exports: Export air passenger fares increased 3.1% in August, after advancing 5.5% in July and 6.4% in June. The August rise was led by a 17.5% increase in Asian fares, which rose 43.0% from April to August. Despite the recent advances, overall export air passenger fares declined 5.8% for the year ended in August. Prices for export air freight increased 1.1% in August following a 0.1% decrease the previous month and a 2.2% advance in June. The index for export air freight prices rose 3.3% over the past year, the largest 12-month advance since the index increased 3.8% for the year ended February 2019.