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Handbook of Methods International Price Program History

International Price Program: History

Timeline

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Key developments

1886: The original charter for the Bureau of Labor Statistics (BLS) included a goal to provide prices of imported goods in the United States and other countries.
1889: For the first time, BLS published a report comparing U.S. prices with those in Great Britain, Germany, France, and Italy.
1919: The Census Bureau began producing unit-value import and export price indexes.
1946: BLS fielded a pilot study to provide import price indexes, but the pilot was cut in 1948 due to a 50-percent cut in the BLS Budget.
1961: The Stigler report recommended that BLS take the responsibility for putting out detailed import and export price indexes.^⁠1
1971: The International Price Program (IPP) was established to produce import and export price indexes.
1974: Started quarterly collection and publication of select import and export price indexes.
1976: Probability sampling technique was implemented.
1982: U.S. Import and Export Price Indexes were placed on list of principal federal economic indicators by the Office of Management and Budget (OMB).
1983: First all-goods import price index was published quarterly.
1984: First all-goods export price index was published quarterly.
1986: Released first price index for select services on a quarterly basis.
1989: Began publishing select price indexes on a monthly basis.
1989: Panel-sampling method that split imports and exports and created a 2-year continuously collected sample frame first was used for the publication of U.S. Import and Export Price Indexes.
1992: Began publishing price indexes using harmonized classifications at the product level.
1992: Published import price indexes for select countries and regions (Locality of Origin indexes) for the first time.
1993: Most indexes for merchandise goods began publication on a monthly basis.
2001: Started providing monthly publications for select services.
2004: Annual reweighting was introduced. Prior to that, the indexes were reweighted every 5 years.
2004: Began web-repricing data collection to survey respondents.
2005: Began publishing price indexes using NAICS classifications at the industry level.
2005: Expanded country and region coverage of Locality of Origin import price indexes.
2012: Expanded detailed industry coverage of Locality of Origin import price indexes.
2018: Published export price indexes for select countries and regions (Locality of Destination indexes).
2018: Published U.S. Terms of Trade indexes for select countries and regions.
2025: Introduced the use of U.S. Census Bureau administrative trade data to price homogeneous product areas leading to a major expansion in the number of published indexes.

Although import price indexes were not established in 1889, efforts were made to compare prices with select countries over the years, and by 1971, the International Price Program (IPP) was established to produce U.S. Import and Export Price Indexes.

In 1961, a report on federal price statistics was prepared by the National Bureau of Economic Research (NBER) for Congress' Joint Economic Committee. The report recommended that responsibility for compiling import and export price indexes be assigned to a federal statistical agency “to obtain the attention and resources for these indexes that we believe are essential.” Until the U.S. Import and Export Price Indexes were published by the Bureau of Labor Statistics (BLS), the only previous measure of price trends in U.S. trade was import and export unit-value indexes produced by the U.S. Census Bureau, which did not provide the precision needed for a deflator. The unit-value indexes were calculated at broad levels and did not distinguish between homogeneous- and heterogeneous-type products. An additional study by NBER Irving Kravis and Robert Lipsey gave more impetus to the proposal for BLS to establish a survey to measure price trends for imports and exports. In the study, "Price Competitiveness in World Trade," Kravis and Lipsey outlined the need for improvements in such measures and the feasibility of producing them. During this time, the BLS Division of Price and Index Number Research, because of its expertise in developing other price measures, had also begun research on the feasibility of producing import and export price indexes. The International Price survey and program were subsequently established in 1971.

Early stages

The newly created international price program first produced annual U.S. Import and Export Price Indexes in 1973. As a response to changing international economic conditions and the need for both the federal government and the private sector to obtain these data on a timelier basis, the program began quarterly collection of price data and publication of U.S. Import and Export Price Indexes in 1974. This also allowed the indexes to be used in deflation of the quarterly gross domestic product estimates produced by the Bureau of Economic Analysis. Commodity area coverage and index detail increased as more samples were initiated. This expansion attempted to meet the needs of users while moving toward the goal of producing price indexes that covered all merchandise goods. In early 1983, the first general price index for all goods imports was published for the fourth quarter of 1982. A price index for all goods exports was published in early 1984 for the fourth quarter of 1983.

The earliest import and export price samples were based on a subjective selection of establishments and items whose price movements were considered representative. A multi-stage design was used to select up-to-date specific import and export items that could be priced over time. Probability sampling techniques were applied for the first two stages (establishments and product area groups) in 1976. In 1982, a third stage of probability sampling (disaggregation within product area groups to unique items) was introduced. To maximize productivity, efforts were made to ensure that frequent importers and exporters constitute approximately 99 percent of each sample.

Improvements and expanding indexes

In 1982, once full coverage of import and export merchandise goods categories was established, the Office of Management and Budget (OMB) placed the U.S. Import and Export Price Indexes on the existing list of principal federal economic indicators (PFEI) joining the Consumer Price Index and Producer Price Index.

The U.S. Import and Export Price Indexes expanded coverage of the target population with the publication of select import and export services price indexes, beginning with the first quarter of 1986 (export air passenger fares). Subsequently, price indexes were added for import air passenger fares and import and export air freight and other trade in services categories. Budget cuts in 2007 resulted in the discontinuation of some services price index categories: import oil tanker freight, import ocean liner freight, export postsecondary education, and export travel and tourism.

In 1989, a limited number of price indexes began monthly publication. This was done primarily to support the Census Bureau’s publication of monthly merchandise goods trade statistics on an inflation-adjusted basis. By January 1993, most of the merchandise goods price indexes were also published monthly.

With the release of March 1992 data, import Locality of Origin price indexes were first published. In 2005 and 2012, coverage of Locality of Origin monthly publication expanded, adding more countries and regions and increasing the level of industry detail.

In 2018, export Locality of Destination price indexes and U.S. Terms of Trade indexes by locality were published for the first time. The indexes were published retroactively to December 2017. In addition, tables comparing import price indexes with their respective PPI counterparts were introduced.

Beginning in 2025, Census administrative trade data became the pricing source for homogeneous product categories accounting for roughly 40 percent of trade in the U.S. Import and Export Price Indexes. This switch reduced the number of sampled items collected by a third.^⁠2 The incorporation of unit-value indexes calculated with the data from Census is a result of advances in statistics and computing power; the updated data sourcing makes improvements to the timeliness, level of detail, and coverage of indexes published. The partial replacement of directly collected survey data with administrative data included revisions to concepts and methods used to calculate the unit-value indexes that feed into the published price indexes. The new data source reduced the burden on voluntary respondents to the U.S. Import and Export Price Indexes survey and greatly expanded the number of prices available to calculate the import and export price indexes. The millions of trade records for the most current month available from the Census trade data improved the quality of the indexes and resulted in a significant expansion in the number of published indexes available to the public starting in March 2025. The Census trade data source will continue to be utilized for research into future expansion of the level of detail published by Locality of Origin import price indexes and Locality of Destination export price indexes.

Notes

^⁠1 Dorothy S. Brady, Edward F. Denison, Irving B. Kravis, Philip J. McCarthy, Albert Rees, Richard Ruggles, Boris C. Swerling, George J. Stigler, The Price Statistics of the Federal Government: Review, Appraisal, and Recommendations, National Bureau of Economic Research, 1961. https://babel.hathitrust.org/cgi/pt?id=mdp.39015048453024&view=1up&seq=77.

^⁠2 See Fast, D., S.E. Fleck, and D.A. Smith. “Unit Value Indexes for Exports – New Developments Using Administrative Trade Data.” Journal of Official Statistics, 38(1), 83–106, 2022, https://doi.org/10.2478/jos-2022-0005; also see Smith, D., A. Enderson-Ohrt, M. Fisher, C. Grant, A. Wong, and B. Wullbrandt. “Enhancing Import and Export Price Indexes: A New Methodology Using Administrative Trade Data.” Working Paper 578, U.S. Bureau of Labor Statistics, December 2024. https://www.bls.gov/osmr/research-papers/2024/ec240080.htm.