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

   The U.S. Import Price Index fell for the third consecutive month, the Bureau of Labor Statistics 
of the U.S. Department of Labor reported today, decreasing 4.7 percent in October and 10.6 percent over 
the past three months.  Export prices declined 1.9 percent in October, the third consecutive monthly 
decrease.

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

Import Goods
   
   Import prices fell 4.7 percent in October after decreases of 3.3 percent and 3.0 percent in 
September and August, three of the four largest monthly declines for the index since being published 
monthly for the first time in December 1988.  Despite falling 10.6 percent over the past three months, 
import prices increased 6.7 percent for the year ended in October.  The three-month decline in import 
prices was largely driven by falling petroleum prices which plunged 16.7 percent in October after 
decreasing 10.2 percent and 9.7 percent, respectively, in September and August.  The October drop in 
petroleum prices was the largest monthly decline since an 18.8 percent fall in April 2003 and the 32.4 
percent decrease over the past three months is the largest quarterly decline since the three months ended 
in February 1991.  For the October 2007-2008 period, however petroleum prices rose 13.1 percent.                
   
   The price index for nonpetroleum imports fell 0.9 percent for the second consecutive month in 
October, although the index increased 5.0 percent over the past year.  The October decrease was led by a 
3.2 percent decline in prices for nonpetroleum industrial supplies and materials, the largest one-month 
drop for that index since a 5.3 percent decrease in April 2003.  Lower prices for metals and natural gas 
were the major factors for the October decline in nonpetroleum industrial supplies and materials prices.  
Lower prices for foods, feeds, and beverages and capital goods, down 1.6 percent and 0.2 percent, 
respectively, also contributed to the decrease in nonpetroleum prices.  

   In contrast, the price indexes for consumer goods and automotive vehicles each ticked up 0.1 
percent in October.
 

Export Goods 

   Export prices fell 1.9 percent in October, the largest one-month decline since the index was first 
published monthly in December 1988.  The decrease followed drops of 0.8 percent in September and 1.6 
percent in August and the 4.3 percent decrease over the past three months was the largest quarterly 
decline since the index was first published in September 1983.  Despite the recent downward trend, 
export prices advanced 4.2 percent over the past 12 months.  The price index for agricultural exports fell 
8.7 percent in October, the second decline in the past three months.  The October drop was led by falling 
prices for soybeans, corn, and wheat.  Agricultural prices rose 5.7 percent for the year ended in October.  
   
   Nonagricultural prices fell for the third consecutive month, declining 1.2 percent in October 
following decreases of 0.9 percent and 0.7 percent, respectively, in September and August.  The October 
decline was the largest one-month drop for the index since first being published monthly in December 
1988 and was led by a 3.8 percent drop in prices for nonagricultural industrial supplies and materials.  
That decline was driven by lower prices for fuels, metals, and chemicals.  The price index for 
nonagricultural exports increased 4.0 percent over the past year.
   
   Most of the major finished goods price indexes advanced in October.  Consumer goods prices 
rose 0.5 percent for the month and increased 3.2 percent over the past 12 months.  The price index for 
automotive vehicles advanced 0.4 percent, an increase that was partially attributable to year-end model 
changeovers.  Capital goods prices, in contrast, declined in October, edging down 0.1 percent, a decrease 
that resulted from a 1.8 percent drop in computer prices.  Excluding computer prices, capital goods 
prices increased 0.3 percent.
   
   
Imports by Locality of Origin 
	
   The sharp decline in fuel prices continued to impact import prices from Canada, the European 
Union, and Mexico in October.  Prices for imports from Canada fell 4.4 percent for the second 
consecutive month and decreased 11.4 percent over the past three months, which was the largest 
quarterly drop since the index was first published in December 1990.  The price index for imports from 
the European Union also fell for the third month in a row, decreasing 1.3 percent in October after 
dropping 1.1 percent and 0.7 percent, respectively, in September and August.  Import prices from 
Mexico decreased 4.9 percent in October, the largest monthly drop since the index was first published in 
December 2003, and the October decrease followed declines of 2.4 percent and 2.5 percent the two 
previous months.  Despite the declines, the price indexes for imports from Canada, the European Union, 
and Mexico increased 12.7 percent, 6.3 percent, and 7.6 percent, respectively, over the past 12 months.
   
   The price index for imports from China declined for the first time since January 2007, falling 0.3 
percent in October.  Previous to the downturn, prices for imports from China were unchanged in 
September and ticked up 0.2 percent in August.  The index rose 4.2 percent for the year ended in 
October.    
   
   Import prices from Japan rose 0.5 percent in October following a 0.6 percent decline the previous 
month.  The index advanced 1.5 percent for the October 2007-2008 period.    
   
   
Import and Export Services

   Import air passenger fares rose 2.9 percent in October after declining 6.9 percent and 3.0 percent, 
respectively, over the previous two months.  The October increase was led by a 4.1 percent advance in 
European fares.  In contrast, export air passenger fares declined for the second consecutive month, 
falling 3.1 percent in October after a 9.9 percent drop in September.  For the year ended in October, 
import air passenger fares rose 25.3 percent while export air passenger fares advanced 8.8 percent.

   Prices for import air freight declined 3.1 percent in October after decreasing 3.4 percent the 
previous month.  Despite the recent declines, the index increased 12.3 percent over the past 12 months.  
A 5.1 percent drop in European air freight prices in October led the overall decline.  The price index for 
export air freight fell 1.2 percent in October; however the index advanced 18.0 percent over the past 
year.   


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 November are scheduled for release on December 11 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.