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June, 1988, Vol. 111, No. 6
Rising export and import prices in 1987
reversed the trend of recent years
I n 1987, both U.S. export and import prices broke the downward trend of recent years. Export prices rose 6.9 percent, the first increase recorded in the all-export price index which was begun in 1983. (See table 1.) Import prices turned sharply upward, rising 14.8 percent after falling every previous year since the all-import index was initiated in 1982.1 (See table 2.)
The rise in export prices reflected the strong upward trend in commodity prices. Food and crude materials prices rose substantially in 1987 compared to previous years. (See chart 1.) For example, exported food prices were up 9 percent last year after falling 13.2 percent in 1986. Similarly, those for crude materials rose 20.7 percent in 1987 following a 2.5 -percent increase in 1986. On the other hand, 1987 price increases for manufactured goods were only marginally changed from those posted in 1986. Price changes for intermediate goods were mixed.
Last year's 14.8-percent increase in the all-import index was a significant upturn from the 8.7-percent drop in 1986; however, when fuels and related products are excluded, the price changes for the last 2 years were very similar, 9.6 and 8.4 percent, respectively. This is indicative of the large influence that fuels exert on the all-import index. Imported fuel prices rose 43.8 percent in 1987 after declining 51.5 percent in 1986.
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1 Price developments discussed in this article are based on data from the BLS International Price Program (IPP). That program produces import and export price indexes based on the Standard Industrial Trade Classification scheme. Both indexes use a modified Laspeyres formula. Price data are collected for more than 22,000 products, and are not seasonally adjusted. Price indexes are weighted by the value of trade in 1980. Beginning with the first-quarter 1988 release in April, the IPP indexes will shift to 1985 weights. In addition, the indexes will be recalculated from 1985 forward using the new weights. BLS also publishes these series by Standard Industrial Classification and end-use classifications.
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International Price Indexes
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