Import Prices Off in January

Washington, DC, February 15, 2007--Prices paid for goods imported into the United States fell 1.2% in January on large declines in petroleum and natural gas prices, the Labor Department reported Thursday.

Imported petroleum prices fell 7.3%. Imported natural gas prices plunged 12% after rising 11% in December and 43% in November.

Excluding fuels such as crude oil and natural gas, however, prices rose 0.3%, the third straight increase. Excluding only petroleum, import prices were unchanged.

Over the past year, import prices are up just 0.1%, as the price of petroleum has fallen 7.3%. Import prices excluding fuels are up 2.8% in the past 12 months.

The 1.2% drop in import prices was in line with the 1.1% drop expected by economists. Import prices had risen 1.1% in December.

The figures show modest inflationary pressures from imports, especially for supplies such as agricultural products, metals, chemicals, and building materials. The declines in fuel prices in January are expected to reverse in February, as colder weather increased demand.

Meanwhile, prices received for exports from the United States rose 0.3% in January and are up 4.1% in the past 12 months. Agricultural export prices rose 0.7% and are up 13.5% in the past year. Export prices excluding agriculture rose 0.3% in January and are up 3.3% year-on-year.

All things equal, the weaker dollar should increase prices of imports in dollar terms, while making exports cheaper in terms of other currencies. A weaker dollar could allow U.S. producers to raise prices without losing competitiveness.

Prices of imported capital goods fell 0.1% in January, the first decline since April 2006. Prices of imported consumer goods rose 0.3%, the ninth consecutive increase. Imported auto prices rose 0.1%.

Prices of imported industrial materials fell 4.1%. Excluding fuels, imported industrial materials prices rose 0.4%.

Prices rose for imports from Europe and Japan and fell for imports from most other regions.

Canadian import prices fell 1.6%. Mexican import prices fell 0.4%. European Union import prices rose 0.5%. Import prices for Japanese goods rose 0.1%, the first increase since June.

Prices of Chinese imports were unchanged. Prices of goods from Southeast Asia fell 1.4%, the largest drop in at least three years.