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

   The U.S. Import Price Index decreased 3.0 percent in September, the Bureau of Labor Statistics 
of the U.S. Department of Labor reported today, following a 2.6 percent decline in August.  Falling 
petroleum prices led the overall decrease, although nonpetroleum prices also declined.  Prices for overall 
exports decreased 1.0 percent for the month.

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

Import Goods
   
   Import prices fell 3.0 percent in September, the largest one-month decline since April 2003.  
Despite the 5.5 percent drop over August and September, the largest two-month decline since the index 
was first published monthly in December 1988; import prices were still up 14.5 percent over the past 
year.  The September decrease in import prices was led by a 9.0 percent decline in petroleum prices, the 
largest monthly drop since October 2006.  The September decline in petroleum prices followed an 8.2 
percent decrease in August; however, the index still rose 47.1 percent over the past 12 months.  
Nonpetroleum import prices also fell in September, declining 0.9 percent after a 0.5 percent drop in 
August.  Prices for nonpetroleum imports rose 6.5 percent for the year ended in September.        
   
   The September decrease in nonpetroleum prices was driven by a 2.9 percent drop in the price 
index for nonpetroleum industrial supplies and materials.  Falling prices for natural gas and metals drove 
the decline.  A 1.7 percent decrease in the foods, feeds, and beverages index largely resulted from lower 
prices for food oils, meat, and fish.  

   Prices for each of the major finished goods categories also fell in September.  The price indexes 
for capital goods, automotive vehicles, and consumer goods each decreased 0.1 percent.  The decrease in 
capital goods prices was led by computer prices, which continued to trend down in September.  The fall 
in computer prices more than offset a 0.2 percent advance in capital goods prices excluding computers.  
The downturn in prices for automotive vehicles was the first decrease since the index fell 0.2 percent in 
January 2006.  Similarly, consumer goods prices decreased for the first time since April 2006. 

 
Export Goods 

   Export prices decreased 1.0 percent in September following a 1.7 percent decline in August.  The 
September decline was led by a 1.0 percent drop in nonagricultural prices, although agricultural prices 
also fell, decreasing 0.3 percent.  Despite the 2.7 percent downturn over August and September, the 
largest two-month decline since the index was first published monthly in December 1988; export prices 
were still up 6.8 percent for the year ended in September.  The decline in nonagricultural prices in 
September followed a 0.7 percent drop in August, and was the largest one-month drop since the index 
was first published monthly in December 1988.  Nonagricultural prices rose 5.6 percent for the 
September 2007-2008 period.  
   
   The September decline in nonagricultural prices was led by a 2.7 percent drop in the price index 
for nonagricultural industrial supplies and materials.  Lower prices for gold, precious metals, and fuel oil 
led the decline.
   
   Prices for capital goods and consumer goods also decreased in September, falling 0.1 percent and 
0.3 percent, respectively.  Excluding a 0.8 percent decrease in computer prices, capital goods prices 
advanced 0.1 percent in September.  In contrast, the price index for automotive vehicles ticked up 0.1 
percent.
   
   The modest decline in agricultural prices was led by lower prices for soybeans, fruit, and 
vegetables, which more than offset increasing corn and wheat prices.  The September decrease in 
agricultural prices followed a 9.6 percent decline in August.  The index advanced 19.5 percent over the 
past twelve months.        

Imports by Locality of Origin 
	
   Lower fuel prices in September drove the declines in import prices from Canada, Mexico, and 
the European Union for the second consecutive month.  Import prices from Canada fell 4.9 percent, the 
largest one-month drop since the index was first published monthly in September 1992.  Prices for 
imports from Mexico declined 1.7 percent, and import prices from the European Union fell 1.3 percent.  
Despite the decreases over the past two months, prices for imports from Canada, Mexico, and the 
European Union rose 19.8 percent, 16.3 percent, and 7.8 percent, respectively, over the past year.
   
   Prices for imports from Japan also declined in September, falling 0.6 percent, which was the first 
monthly downturn for the index since November 2007 and the largest one-month drop since January 
2006.  The index rose 1.1 percent over the past year.
   
   In contrast, import prices from China continued to rise in September, ticking up 0.1 percent for 
the second consecutive month after rising 3.2 percent from February to July.  Import prices from China 
increased 4.8 percent for the year ended in September.    
   
Import and Export Services

   Import air passenger fares decreased 6.9 percent in September after falling 3.0 percent in August.  
The September decline was led by a 10.1 percent seasonal decrease in European fares.  The index for 
import air passenger fares increased 15.0 percent for the September 2007-2008 period.  Export air 
passenger fares fell 8.7 percent in September.  The decrease was driven by a 10.9 percent seasonal drop 
in European fares.  Over the past 12 months, the index increased 13.1 percent.

   The price index for import air freight decreased 3.4 percent in September, led by an 8.1 percent 
decline in European air freight prices.  The September drop in overall import air freight prices followed a 
0.2 percent decrease the previous month.  Export air freight prices fell 1.4 percent in September after 
advancing 3.6 percent in August.  Import air freight prices rose 16.8 percent over the past 12 months 
while export air freight prices advanced 22.0 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 October are scheduled for release on November 14 at 
8:30 A.M. (EST)

                                        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 -- Starting in September 2008 the Import Air Passenger Fares Indexes represent 
changes in the average revenue per passenger received by foreign carriers from U.S. residents and are 
calculated from data obtained from an airline consulting service.  These data include tickets sold by 
travel agencies and travel websites.  Tickets sold directly by the airlines are excluded, as are frequent 
flyer tickets generally.  Starting in January 2008 the Export Air Passenger Fares Indexes represent 
changes in the average revenue per passenger received by U.S. carriers from foreign residents and 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 indexes. The Air Freight Indexes are 
calculated from data collected directly from airlines. 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.