U.S. Import Prices Rose Less Than Expected in April

U.S. import prices advanced 0.2 percent in April, the U.S. Bureau of Labor Statistics reported today, after
increasing 0.6 percent in March. The April advance was driven by higher fuel prices, which more than offset
decreasing prices for nonfuel imports. Prices for U.S. exports rose 0.2 percent in April after a 0.6-percent
rise in March.

Imports

The price index for U.S. imports rose 0.2 percent in April, continuing the upward trend that began in
January. The April rise followed a 0.6-percent advance in March and a 1.0-percent increase in February.
Despite the recent monthly advances, import prices declined 0.2 percent for the 12-month period ended in
April. The April year-over-year decrease was driven by lower nonfuel prices. (See table 1.)

Fuel Imports: The price index for fuel imports rose 2.5 percent in April, after increasing 6.9 percent in
March and 10.2 percent in February. A 6.1-percent rise in petroleum prices drove the increase in fuel prices.
Natural gas prices declined 53.7 percent in April, the largest decrease since the index was first published on
a monthly basis in December 1994. Fuel prices rose 6.9 percent over the past 12 months. The price index for
petroleum increased 7.0 percent for the year ended in April, and prices for natural gas declined 10.5 percent
over the same period. The 12-month decrease in natural gas prices was the largest decline since the index
fell 27.3 percent in June 2018.

All Imports Excluding Fuel: The price index for nonfuel imports edged down 0.1 percent in April, after
falling 0.2 percent in March. In April, falling prices for finished goods and nonfuel industrial supplies and
materials more than offset an increase in prices for foods, feeds, and beverages. Nonfuel import prices
declined 0.9 percent from April 2018 to April 2019, the largest 12-month drop since the index fell 0.9
percent for the year ended August 2016. All of the major import categories except foods, feeds, and
beverages contributed to the decrease in nonfuel prices over the past year.

Nonfuel Industrial Supplies and Materials: Nonfuel industrial supplies and materials prices edged down 0.1
percent in April after recording no change the previous month. The April decrease was driven by declining
prices for building materials and chemicals which more than offset rising prices for unfinished metals.

Finished Goods: Prices for imported finished goods were down in April. The price index for capital goods
declined 0.4 percent, and consumer goods and automotive vehicles prices decreased 0.3 percent and 0.1
percent, respectively.

Foods, Feeds, and Beverages: The price index for foods, feeds, and beverages rose 2.8 percent in April, the
largest monthly advance since the index increased 3.1 percent in July 2016. The April advance was driven
by higher prices for fruit, vegetables, and meat.

Exports

The price index for U.S. exports advanced 0.2 percent in April, after increasing 0.6 percent in March and 0.7
percent in February. Rising prices for nonagricultural exports led the overall advance in April and more than
offset a decline in prices for agricultural exports. U.S. export prices rose 0.3 percent over the 12-month
period ended in April. (See table 2.)

Agricultural Exports: The price index for agricultural exports decreased 1.5 percent in April following a
1.0-percent advance in March. The April decline was driven by a 17.2-percent decrease in vegetable prices
and a 6.8-percent decline in fruit prices. A 2.6-percent drop in corn prices also contributed to the overall
decline in April. Prices for agricultural exports fell 2.8 percent over the past year. The 12-month decrease
was led by a 14.1-percent drop in soybean prices. Lower prices for fruit, cotton, nuts, meat, and corn also
contributed to the over-the-year decline in agricultural export prices.

All Exports Excluding Agriculture: Nonagricultural export prices rose 0.4 percent in April, after
increasing 0.7 percent the previous month. Higher prices for nonagricultural industrial supplies and
materials drove the increase in nonagricultural export prices, although rising prices for automotive vehicles
also contributed. The price index for nonagricultural exports increased 0.7 percent over the past year.

Nonagricultural Industrial Supplies and Materials: Nonagricultural industrial supplies and materials prices
advanced 0.9 percent in April following a 1.9-percent rise the previous month. The April increase was led
by a 3.6-percent rise in export prices for petroleum. The increase in prices for petroleum more than offset
declining prices for natural gas, which fell 12.0 percent in April.

Finished Goods: Export prices for finished goods were mostly flat in April. The price index for export
automotive vehicles rose 0.2 percent, driven by higher prices for nonengine parts and accessories. The price
index for capital goods recorded no change, after increasing 0.1 percent in March. Consumer goods prices
recorded no change for the second consecutive month.

Measures of Import and Export Prices by Locality

Imports by Locality of Origin: Prices for imports from China declined 0.2 percent in April, after recording
no change in March. Import prices from China decreased 1.1 percent over the past 12 months, the largest
over-the-year drop since the index fell 1.1 percent in May 2017. The price index for imports from Japan
edged down 0.1 percent in April, after advancing 0.1 percent in both March and February. Prices for imports
from Japan recorded no change over the past year. The price index for imports from Canada advanced 1.3
percent in April. Higher fuel prices drove the monthly rise. Import prices from the European Union
increased 0.1 percent in April. Prices for imports from Mexico rose 1.1 percent in April, the largest monthly
advance since the index increased 1.5 percent in September 2017. (See table 7.)

Exports by Locality of Destination: Prices for exports to China rose 0.6 percent in April, after increasing
0.5 percent in March. Higher prices for nonmanufactured exports led the April advance. Despite the recent
increases, export prices to China declined 2.7 percent over the past year. The price index for exports to
Japan increased 1.0 percent in April, after rising 0.3 percent in March and 1.2 percent in February. Despite
the recent monthly advances, prices for exports to Japan fell 0.6 percent over the past 12 months. In April,
export prices to Canada declined 0.8 percent and export prices to Mexico decreased 0.4 percent. The price
index for exports to the European Union advanced 0.7 percent in April, after recording a 0.2-percent rise in
March and a 0.7-percent increase in February. (See table 8.)

Terms of Trade Indexes: Terms of Trade indexes are based on country, region, or grouping and measure
the change in the purchasing power of exports relative to imports. The U.S. terms of trade with China
advanced 0.8 percent in April. The rise in the U.S. terms of trade with China was driven by the increase in
export prices to China. U.S. terms of trade with Japan rose 1.0 percent in April, after advancing 0.2 percent
and 1.1 percent the previous 2 months. The index for U.S. terms of trade with Mexico declined 1.5 percent
in April, the largest monthly decrease since the index was first published in December 2017. U.S. terms of
trade with Canada also declined in April, falling 2.1 percent. U.S. terms of trade with the European Union
rose 0.7 percent in April, driven by higher export prices. (See table 9.)

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This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell