Frequently Asked Questions (FAQs)
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What are the U.S. Import and U.S. Export Price Indexes?
Answer: The U.S. Import and U.S. Export Price Indexes measure the change over time
in the prices of goods or services purchased from abroad by U.S. residents (imports) or
sold to foreign buyers by U.S. residents (exports). The Import/Export Price Indexes,
along with the Consumer Price Index and Producer Price Index, form the basis of three
major Bureau of Labor Statistics (BLS) programs measuring the change in the prices of
goods and services in the U.S. economy. Each of the three has been designated as a Principal
Federal Economic Indicator.
How are the Import/Export Price Indexes used?
Answer: The Import/Export Price Indexes are primarily used to deflate foreign trade statistics produced by the U.S. Government. Gross Domestic Product (GDP) calculated by the Bureau of Economic Analysis (BEA), is an example of a statistic that is deflated using the Import and Export Price Indexes. The Import/Export Price Indexes are also a valuable input into the processes of measuring inflation, formulating fiscal and monetary policy, forecasting future prices, conducting elasticity studies, measuring U.S. industrial competitiveness, analyzing exchange rates, negotiating trade contracts, analyzing import prices by locality of origin, analyzing export prices by locality of destination, and analyzing U.S. terms of trade with select trade partners.
What goods and services do the Import/Export Price Indexes measure?
Answer: All goods except for military goods, works of art, used items, charity donations, railroad equipment, items leased for less than a year, rebuilt and repaired items, and selected exports (custom-made capital equipment). Covered services are air freight and air passenger fares.
What classification systems are used to aggregate Import/Export Price Indexes?
Answer: Import and export price indexes for goods are published using the following classification systems:
Items are classified, respectively, by end use for the Bureau of Economic Analysis System, by industry
for the North American Industry Classification System (NAICS), and by product category for the Harmonized
System (HS). While classification by end use and product category are self-explanatory, a couple of notes are in order for classifying items by
industry. In the NAICS tables, for both imports and exports, items are classified by output industry, not
input industry. As an example, NAICS import index 326 (plastics and rubber products) would include outputs
such as manufactured plastic rather than inputs such as petroleum.
How are Import/Export Price Index data obtained?
Answer: The International Price Program (IPP) selects sample establishments
based upon their relative trade value in imports and exports during the course of a year.
After an establishment is selected for inclusion, a BLS field economist visits the establishment
to enlist cooperation and to select the exact items that will be priced on a monthly basis.
All information provided by the establishment is protected under BLS confidentiality rules.
What prices are used to calculate the Import/Export Price Indexes?
Answer: The majority of prices used in calculating import price indexes are quoted FOB (Free On Board) Foreign Port and the majority of prices used in calculating export price indexes are quoted FAS (Free Along Ship) U.S. Port; duty is not included. While the International Price Program prefers exit point price bases, point of origin or entry point price bases are used if they are the industry standard.
Are import and export prices shared with other BLS price programs?
Answer: In certain situations, yes. In an effort to increase efficiency and reduce overall respondent burden, the Consumer Price Index Program, the Producer Price Index Program, and the International Price Program may share resources to collect pricing information from respondents that are selected for inclusion in multiple surveys. In these cases, prices for the same product or service may be used by more than one price program; however, each program would determine appropriate weighting according to its own established methodology. All information shared across programs is used for statistical purposes only and is protected under the BLS confidentiality pledge.
Do Import/Export Price Indexes include import duties?
Answer: An import duty is a tax or tariff collected on imports, typically by a country's Customs agency. U.S import duties would be placed on imports coming into the United States whereas other countries' import duties would be placed on exports from the United States. The prices for the items used to calculate Import/Export Price Indexes exclude duties. One of the primary purposes of the indexes is to deflate the foreign trade component of national accounts which specifically exclude taxes when measuring Gross Domestic Product (GDP) accounts.
Are adjustments made for changes in the price or quality of a measured item?
Answer: The IPP attempts to hold the quality of items being priced constant so that
the pure price change can be isolated from changes in prices brought about by alterations to
the item. When an item price used in index calculation has a specification modification, the
IPP adjusts that item's price to reflect any change in the quality of the item.
How are the Import/Export Price Indexes weighted?
Answer: The Import/Export Price Indexes are very sensitive to the changing composition of world trade. For this reason, the IPP reweights its published index aggregation structures for goods every year with a two year lag in the weights. This means that relative importance data in 2018 goods indexes are based on 2016 trade values. The IPP also resamples each half of the import/export universe every other year. The aggregation structure below the published level incorporates the use of sampling weights in the estimator. Sampling weights generally change every two years when a new sample is drawn for a given product area.
How are the Import/Export Price Indexes constructed?
Answer: The formula used to calculate the Import/Export Price Indexes is a modified
form of the Laspeyres index. A Laspeyres index uses fixed base period quantities to aggregate
prices. This means that the quality of goods and services is fixed; new goods do not appear,
and the prices of goods that disappear must be observable. Because these implications are not
consistent with the actual workings of the economy, adjustments must be made to the index.
How are the Import/Export Price Indexes interpreted?
Answer: An index is a tool that simplifies the measurement of movements in a
numerical series. Movements are measured with respect to the base period when the index is
set at 100. Currently, most Import/Export Price Indexes have an index base of 2000=100 and
price changes are measured in relation to that figure. For example, an October 2017 Import
Price index of 106.8 for consumer goods indicates that there has been a 6.8-percent increase in price
since 2000. Similarly, an October 2017 Import Price Index of 39.2 for computers means that
there has been a 60.8-percent decrease in price since 2000.
When are Import/Export Price Index data available?
Answer: The IPP publishes the Import/Export Price Indexes monthly. The information
is released at 8:30 AM Eastern Time, usually during the second week following the reference
month. Click on the link below to see the current list of release dates.
Are there limitations to the Import/Export Price Indexes?
Answer: Although import and export transaction prices are used to calculate the
Import/Export Price Indexes, the IPP does not publish price information. For this reason,
the Import/Export Price Indexes cannot be used to measure differences in price levels among
different products and services or among different localities of origin. A higher index number
for locality A (or product X) does not necessarily mean that prices are higher than for
locality B (or product Y) with a lower index number. It only means that prices have risen
faster for locality A (or product X) since the reference period.
How does the International Price Program handle survey items that are priced in foreign currencies?
Answer: About 6 percent of imports and exports currently surveyed are priced in foreign currencies. The IPP uses an exchange rate factor that is an average for the month prior to the pricing month. All prices are converted to U.S. dollars, considering the Import/Export Price Indexes are calculated in U.S. dollar terms.
How do unit value indexes differ from the Import/Export Price Indexes?
Answer: A unit value index measures the change in the value of items regardless of
whether the items are homogeneous and, therefore, can be affected by changes in the mix of
items as well as changes in their prices. In contrast, a price index reflects an average of
the proportionate changes in the prices of a specified set of items.
Where can I obtain international price information?
Answer: The Department of State publishes a quarterly report containing indexes
of living costs abroad, quarters allowances, hardship differentials, and danger pay allowances.
This information is compiled by the Office of Allowances for use in establishing allowances
to compensate U.S. Government civilian employees for costs and hardships related to assignments
abroad. More information is available from the Department of State, (202) 663-1121.
Where can I obtain more information about the Import/Export Price Indexes?
Answer: For specific details about how to obtain additional information, please contact us.
Last Modified Date: April 15, 2020