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July 2005, Vol. 128, No. 7
U.S. import and export prices in 2004
The Bureau of Labor Statistics import and export price indexes both increased for a third consecutive year in 2004. Import prices were up 6.7 percent for the year, almost triple the 2.4-percent increase seen in 2003. Export prices saw the highest increase in 15 years with a 4.0-percent advance in 2004; the increase in the previous year was only 2.2 percent.
Prices within the industrial supplies and materials index had the most impact on the import side, increasing 22.0 percent for the year. The industrial supplies and materials price index comprises the fuel price index, which increased 31.5 percent, and the nonfuel industrial supplies and materials price index, which increased 13.4 percent. Import prices were up in all major categories, with the exception of the capital goods index. Downward movements for computer, peripheral, and semiconductor prices caused the contrasting trend in the capital goods index. On the export side, annual price increases were posted for each of the major indexes, except for the foods, feeds, and beverages price index, which decreased 4.5 percent. Similar to the import price index, the largest movement in the export price index was seen in the nonagricultural industrial supplies and materials price index, which posted a 16.6-percent increase in 2004. (See table 1.)
The key factor behind the substantial import and export price movements in 2004 was the growth in international demand, especially from China, for raw materials such as petroleum and steel. According to statistics from China’s Customs Bureau, the total value of imports into China increased 36 percent. Import increases were most significant in iron ore and fine mine products (161.8 percent), crude oil (71.4 percent), unwrought copper (37.9 percent), and plastics (31.5 percent).1 China’s demand for these raw materials led to tight global supplies and higher international prices, which put additional upward pressure on prices for manufactured goods.
This excerpt is from an article published in the July 2005 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 Chinese data obtained from the Ministry of Commerce of the People’s Republic of China, on the Internet at http://english. mofcom.gov.cn (visited June 3, 2005).
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