Higher Oil Prices Raise Import Costs in September

As expected, import prices rebounded in September to rise +1% MoM after falling-.3% MoM in August. Petroleum prices rose +5.4% MoM in September. Excluding petroleum, import prices rose +.2% MoM in September. Over the past year, import prices have risen 5.2% YoY with ex-petroleum prices rising by a more restrained +2% YoY. Petroleum prices have risen 20% since September 2006. Natural gas prices fell -4.2% MoM. If all energy costs are excluded, import prices fell -.1% MoM, the first decline since February.

After petroleum products, industrial supplies rose the most at +2.2% MoM (+12% YoY), followed by foods and beverages at +1.2% MoM and +8.9% YoY. Autos and consumer goods rose +.2% MoM and are both up between +1.1-1.5% YoY. Capital goods prices remain subdued. They were unchanged in September, and rose only +.5% over the past year.

Canada, a major trade partner, had price gains of +.4% MoM (+5.3% YoY) after the Canadian dollar reached parity with the US dollar for the first time in 30 years. Mexican prices rose +2.8% MoM and are up +9.8% YoY. Both Canada and Mexico are big exporters of oil and natural gas to the US. Chinese import prices rose +.2% MoM (+1.6% YoY), with most of the increase occurring in the past five months. Japanese prices rose +.1% MoM (-.5% YoY).

Export prices rose +.3% MoM in September, and are up +4.5%YoY mainly due to 23% price rises in agricultural and processed food prices.