Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=157123
Story Retrieval Date: 7/23/2014 4:08:35 AM CST
The Bureau of Labor Statistics reported Wednesday import prices increased in January by 1.4 percent largely because of rising oil prices.
The January increase was on top of a 0.2 percent December increase. For the
year, import prices were 11.5
percent higher. Overall export prices rose 0.8 percent, a 3.4 percent year-on-year
Analysts surveyed by Bloomberg LP estimated a 1 percent increase from December to January and 10.8 percent for year-over-year change. Although prices were up, experts said the increase should not spark inflationary concerns. Although the rise isn’t expected to show up in the price of consumer goods, it does reflect price pressure at the producer level, they said.
The U.S. import and export price indexes track the changes in prices in imports and exports. Along with the Consumer Price Index and Producer Price Index, the indexes measure inflation and are considered principal economic indicators. The base line of all imports excluding fuel is December 2001, which equals 100. For all other indexes, the base year is 2000.
Jay Bryson, an economist with Wells Fargo Securities LLC in Charlotte, N.C., said, "The yearly changes are kind of eye popping, but what I would say is kind of what's being reflected there is that oil prices have rebounded from their collapse of last year."
Fuel prices, which rose 5.3 percent in January after a 0.6 percent drop in December, have drastically affected import prices for three consecutive quarters. Petroleum prices rose 4.8 percent and natural gas prices increased 18.8 percent. For the year, natural gas prices fell 2.9 percent.
Nonfuel prices rose for the fifth time in six months by 0.4 percent. The main factors for the increase were higher prices in nonfuel industrial supplies and materials.
given the overall weakness still in the global economy, I wouldn't expect to
see huge increases in the overall index of import prices," Bryson
On the export side, nonagricultural prices, which increased 0.7 percent in January, contributed 80 percent of the overall increase in export prices. The agricultural price index increased 1.4 percent in January and rose 4.5 percent for the year. Most of that was attributable to a 12-month increase of 5.7 percent in soybean prices.