Summary
Earlier today, the Labor Department reported that import prices surged 1.5% during October. The numbers continue to indicate that inflationary pressures from this source persist. Elsewhere, the Commerce Department reported that the September US trade deficit came in at $51.6 billion, down from August's revised $53.5 billion.
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October Import Prices
According to today's Labor Department release, import prices recorded a sharp 1.5% increase during October, which compares with a revised 0.5% rise during September. (The September change originally had been reported as +0.2%.)
Based on today's release, the price of petroleum imports spiked 11.7% in October, versus September's increase of 2.8%. (Petroleum prices for September originally were reported at +0.6%.) October prices for non-petroleum imports fell a reported 0.2%, versus being unchanged in September. (The September result was originally reported at +0.1%.)
As of October, import prices were up 9.7% year over year, versus a year-over-year increase of 8.1% for the 12 months ended September. For the three months ended October, prices were up at a 14.4% annual rate, which compares with a 9.4% rate for the three months ended September.
The following table is a way of illustrating how the United States has been importing a rising level of inflation from abroad, a sensible outcome when contemplated in commonsense terms. Since the US is a nation that imports more and more of what it consumes, it therefore produces less and less of it domestically. And this rising level of imports has been against the backdrop of a falling exchange-rate value for the dollar, on balance, over the last couple years, give or take. This just happens to parallel the swing in import prices over roughly the same period.
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U.S. IMPORT PRICES
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12-Month Change as of
Month of Year Shown
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Month 2004 2003 2002 2001 2000
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October 9.7% 0.8% 1.9% -7.4% 5.4%
September 8.1% 0.7% -0.4% -5.6% 6.1%
August 7.0% 2.0% -1.3% -4.4% 5.9%
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3-Mo. Avg. 8.3% 1.2% -0.1% -5.8% 5.8%
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July 5.6% 2.3% -1.7% -4.1% 6.8%
June 5.7% 2.2% -3.6% -2.6% 7.9%
May 6.9% 1.0% -3.7% -0.8% 6.1%
April 4.6% 1.8% -3.6% -0.7% 6.6%
March 1.1% 6.8% -5.6% -1.6% 9.2%
February 0.9% 7.5% -8.3% +0.2% 9.3%
January 2.2% 5.8% -8.9% +2.8% 7.1%
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10-Mo. Avg. 5.2% 3.1% -3.5% -2.4% 7.0%
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September Trade Data
Earlier today, the Commerce Department reported that the US trade deficit (goods and services) contracted to $51.6 billion during September, down from a revised $53.5 billion deficit in August. The August figure was originally reported at minus $54.0 billion.
Additional details on the September trade data will follow.
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