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                                   U.S. IMPORT AND EXPORT PRICE INDEXES
                                              - AUGUST 2008 -

   The U.S. Import Price Index decreased 3.7 percent in August, the Bureau of Labor Statistics of 
the U.S. Department of Labor reported today, after a revised 0.2 percent advance in July.  A 12.8 percent 
drop in petroleum prices led the August decline.  Prices for overall exports decreased 1.7 percent for the 
month.

                             Percent changes in import and export price indexes
                                           by End Use category
                                       - not seasonally adjusted -

Import Goods
   
   Import prices fell 3.7 percent in August, the first decrease since December 2007 and the largest 
one-month decline since the index was first published monthly in December 1988.  Despite the drop, 
import prices rose 16.0 percent over the past year.  The August decrease in import prices was led by a 
12.8 percent decline in petroleum prices, the largest monthly drop since an 18.8 percent decline in April 
2003.  The August decline in petroleum prices followed a revised 1.0 percent decrease in July; however 
the index still rose 52.0 percent over the past 12 months.  Nonpetroleum import prices declined 0.3 
percent in August after a 0.7 percent increase the previous month.  The August decrease was driven by a 
16.4 percent downturn in natural gas prices.  Overall nonpetroleum prices rose 7.5 percent for the year 
ended in August.        
   
   Excluding all fuels, import prices ticked up 0.2 percent in August.  Rising prices for nonfuel 
industrial supplies and materials; foods, feeds, and beverages; and automotive vehicles all contributed to 
the modest increase.  Nonfuel industrial supplies and materials prices advanced 0.4 percent in August as 
higher chemical prices offset declining prices for unfinished metals.  A 0.7 percent increase in foods, 
feeds, and beverages largely resulted from elevated prices for meat, fish, and fruit.  A 0.1 percent up-tick 
in the price index for automotive vehicles also contributed to the increase in nonfuel import prices.         

   Capital goods prices declined in August while prices for consumer goods were unchanged.  The 
0.1 percent decrease in capital goods prices was led by computer prices which continued to trend down 
in August.  The fall in computer prices more than offset a 0.2 percent advance in capital goods prices 
excluding computers. 

 
Export Goods 

   Export prices, down 1.7 percent in August, fell for the first time since October 2006.  The August 
decline was mostly led by a 9.6 percent drop in agricultural prices, although nonagricultural prices also 
fell, decreasing 0.7 percent.  Despite the downturn, export prices rose 8.2 percent for the year ended in 
August.  The decline in agricultural prices in August followed a 6.5 percent advance in July, and was the 
largest one-month drop since the index was first published monthly in December 1988.  The August 
decline was led by sharp decreases in corn, soybeans, and wheat prices, all of which remained up over 
the past 12-months.  The price index for overall agricultural exports rose 24.8 percent over the same 
period.  The August decrease in nonagricultural prices was the first monthly decline since July 2007 and 
the index advanced 6.7 percent over the past year.        
   
   The August decrease in nonagricultural prices resulted from a 2.5 percent downturn in the price 
index for nonagricultural industrial supplies and materials which last recorded a monthly drop in 
September 2007.  Decreasing prices for fuel led the decline.      
   
   In contrast, prices for each of the major finished goods categories increased in August.  
Consumer goods prices rose 0.3 percent for the second consecutive month.  The price indexes for capital 
goods and for automotive vehicles each rose 0.1 percent.  Excluding a 0.5 percent decrease in computer 
prices, prices for capital goods excluding computers advanced 0.3 percent in August.
          
   
Imports by Locality of Origin 
	
   Lower fuel prices impacted the import price indexes from Canada, Mexico, and the European 
Union in August.  Import prices from Canada fell 3.8 percent, the largest one-month drop since a 4.4 
percent decrease in October 2006.  Prices for imports from Mexico declined 3.2 percent while import 
prices from the European Union fell 0.8 percent.  Despite the August decreases, prices for imports from 
Canada, Mexico, and the European Union rose 21.4 percent, 16.7 percent, and 9.2 percent respectively 
over the past 12 months.
   
   Prices for imports from Japan also declined in August, edging down 0.1 percent, which was the 
first monthly downturn for the index since November 2007.  The index rose 1.8 percent over the past 
year.
   
   In contrast, import prices from China continued to rise in August, ticking up a modest 0.1 percent 
after rising 2.1 percent over the previous three months.  Import prices from China increased 4.9 percent 
for the year ended in August.    
   
   
Import and Export Services

   Import air passenger fares fell 3.0 percent in August after rising 4.1 percent and 18.3 percent, 
respectively, in July and June.  The August downturn was led by a 5.7 percent decrease in Asian fares.  
The index for import air passenger fares increased 15.8 percent for the August 2007-2008 period.  
Export air passenger fares rose 5.3 percent in August and 19.8 percent over the past year.  The August 
increase was driven by a 16.1 percent jump in Asian fares.

   The price index for import air freight edged down 0.2 percent in August as a 1.7 percent decline 
in Asian air freight prices offset a 1.6 percent increase in European air freight prices.  The August 
downturn in overall import air freight prices followed a 2.6 percent increase the previous month.  In 
contrast, export air freight prices rose 3.6 percent in August after advancing 1.6 percent in July.  Import 
air freight prices rose 21.5 percent over the past 12 months while export air freight prices advanced 25.4 
percent over the same period.  

                                             CONTENTS OF RELEASE

This news release includes the following tables:

Table 1    U.S. Import Price Indexes, by End Use
Table 2    U.S. Export Price Indexes, by End Use
Table 3    U.S. Import Price Indexes, by NAICS
Table 4    U.S. Export Price Indexes, by NAICS
Table 5    U.S. Import Price Indexes, by Harmonized System
Table 6    U.S. Export Price Indexes, by Harmonized System
Table 7    U.S. Import Price Indexes, by Locality of Origin
Table 8    U.S. International Price Indexes for Selected Transportation Services
-------------------------------------------------------------------
Import and Export Price Index data for September are scheduled for release on October 10 at 
8:30 A.M. (EDT)

                                             TECHNICAL NOTE


Import and Export Merchandise and Services Price Indexes -- All indexes use a modified Laspeyres 
formula and are not seasonally adjusted.  Price indexes for merchandise goods are reweighted annually, 
with a two-year lag in the weights.  Published series use a base year of 2000=100 where possible.  More 
detailed index series and additional information may be obtained at http://www.bls.gov/mxp, or by 
calling (202) 691-7101.

Merchandise Goods Classification Systems -- The merchandise price indexes are published using 
three classification systems.  Items are classified by end use according to the Bureau of Economic 
Analysis Classification System, by industry according to the North American Industry Classification 
System (NAICS), and by product category according to the Harmonized System (HS).  While 
classification by end use and product category are self-explanatory, some notes are in order for 
classifying items by industry.  In the NAICS imports and exports tables, items are classified by output 
industry, not input industry.  As an example, NAICS import index 326 (plastics and rubber products 
manufacturing) include outputs such as manufactured plastic rather than inputs such as petroleum.  The 
NAICS classification structure also matches the classification system used by the PPI (Producer Price 
Index) to produce the NAICS primary products indexes.

Import Price Indexes -- Products have been classified by the Harmonized Tariff Schedule of the United 
States Annotated (TSUSA).  Import prices are based on U.S. dollar prices paid by the U.S. importer.  
The prices are generally either "free on board" (f.o.b.) foreign port or "cost, insurance, and freight" 
(c.i.f.) U.S. port transaction prices, depending on the practices of the individual industry.  The index for 
crude petroleum is calculated from data collected by the U.S. Department of Energy.  

Export Price Indexes -- Products have been classified by the Harmonized Schedule B classification 
system of the U.S. Bureau of the Census.  The prices used are generally either "free alongside ship" 
(f.a.s.) factory or "free on board" (f.o.b.) transaction prices, depending on the practices of the individual 
industry.  Prices used in the grain index, excluding rice, are obtained from the U.S. Department of 
Agriculture.

Services Price Indexes -- The Import Air Passenger Fares Indexes are calculated from data obtained 
from a commercial airline reservation system.  These data exclude frequent flyer tickets and those sold 
by consolidators.  The Export Air Passenger Fares Indexes are calculated from data collected directly 
from airlines.  These data include frequent flyer tickets and those sold by consolidators.  Taxes and fees 
are excluded from both the Import and Export Air Passenger Fares Indexes.  The Air Freight Indexes are 
calculated from data collected directly from companies.  These data exclude mail and passenger 
baggage.  The scope of the service being priced is the movement of freight from airport to airport only, 
and does not include any ground transportation or port service.  The Air Freight Indexes are presented 
using two definitions: Balance of Payments (which represent transactions between U.S. and foreign 
residents) and International (which represent transactions inbound to and outbound from the U.S.).  Fact 
sheets specifying detailed information for each services industry are available at http://www.bls.gov/mxp 
under "Publications and Other Documentation."

Import Indexes by Locality of Origin -- Prices used in these indexes are a subset of the data collected 
for the Import Price Indexes.  Beginning with January 2002, the indexes are defined by locality of origin 
using a nomenclature based upon the North American Industry Classification System (NAICS).  
Nonmanufactured goods are defined as NAICS 11 and 21 and manufactured goods are defined as 
NAICS 31-33. 
 
Revision Policy -- To reflect the availability of late reports and corrections by respondents, monthly data 
may be revised in each of the three months after original publication.  After three months, no further data 
revisions take place.  So, for example, data released in the January release will be subject to revision in 
the releases for February, March, and April.

Uses of the Data -- The primary use of the indexes is to deflate trade statistics, notably the foreign trade 
sector of the National Income and Product Accounts constructed by the Department of Commerce.  
Other published indexes are useful for general market analysis.  For trade in international services, 
Balance of Payments indexes are used for deflating National Income and Product Accounts, while 
International indexes are more appropriate for market analysis.  Merchandise and services indexes also 
can be used to study U.S. competitiveness and to compute price elasticities, and the merchandise import 
indexes by country or region of origin are useful in terms of trade analysis.

E-Mail Subscription -- The IPP news release is available through an e-mail subscription service at 
(http://www.bls.gov/mxp) or (http://www.bls.gov/bls/newsrels.htm).
 
Additional Information -- More detailed IPP data are available on the IPP home page at 
(http://www.bls.gov/mxp).  Flat Files and the FTP server are available for users requiring access to 
either a large volume of time series data or other IPP-related documentation. The FTP site can be 
accessed at ftp://ftp.bls.gov.   For technical assistance in using the BLS Internet site, send e-mail to 
(labstat.helpdesk@bls.gov).  For IPP data requests, send e-mail to (mxpinfo@bls.gov). 

Information from this release will be made available to sensory impaired individuals upon request.  
Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.