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January 1983, Vol. 106, No. 1
U.S. import and export prices indexes
show declines during the first half
Mark J. Johnson
U.S. import prices declined 2.1 percent during the first half of 1982, led by lower prices for crude petroleum and food products. (See table 1.) The downward movement resulted in part from weakness in both the U.S. economy and the international economy, including such major U.S. trading partners as Japan, Canada, and the United Kingdom.1 The strength of the dollar vis-a-vis other major currencies also helped hold down import prices.2 Both developments contributed to the slowdown in domestic inflation, as measured by the Consumer Price Index and the Producer Price Index.
The same factors also moderated price rises for U.S. exports, with the strong dollar pushing up the cost of U.S. products in major world markets. Some key indexes fell substantially, such as those for grain and nonferrous metals. Other rose slightly, including indexes for machinery and farm equipment. (See table 2.)
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1 The indexes of industrial production of Canada, Japan, the United States and the United Kingdom for the first half of 1982 and all of 1981 indicate sluggish levels. This trend was especially pronounced in the first half of 1982, as the following figures on industrial production indicates. All indexes use 1975 as the base year, and are seasonally adjusted.
|Japan||Canada||United Kingdom||United States|
See International Financial Statistics, Vol. 35, Number 10, October 1982, pp. 111, 243, 423, 429.
2 The dollar exchange rate into other major currencies is a key factor in international trade. It measures how many dollars are needed to purchase a unit of another currency. If the dollar appreciates (strengthens) vis-a-vis another currency, it takes fewer dollars to purchase a unit of that currency: at the same time it takes more units of the other currency to buy a dollar. In this case, U.S. importers may have to pay fewer dollars to purchase goods from other countries and purchasers in other countries may find they must pay more of their own currency to buy U.S. goods. The opposite occurs when the dollar depreciates (weakens) against another currency. From late 1980, the dollar rose steadily against the currencies of major U.S. trading partners through the period covered by this report.
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