The U.S. Import Price Index fell 1.2 percent in June. This was the largest monthly decline since December 1992 and was largely attributable to a 7.4 percent decline in prices for imported petroleum products.

The U.S. Export Price Index also fell in June, declining 0.1 percent after rising 0.4 percent in the previous month. The month-to-month decline was due mainly to a fall off of 2.2 percent in prices received for agricultural exports.

We can get some interesting insights into national and international price changes if we look at data for the most recent twelve months and then compare that data with price changes for the twelve months preceding that. From the June 1994-95 period to the June 1995-96 period, the change in the price index for all imports declined from +5.3 percent to -0.8 percent. For the same periods, the change in the price index for petroleum imports declined from +9.3 percent to +4.6 percent. On the exports side of the ledger, the change in the price index for all exports declined from +6.0 percent to +0.9 percent. But, the change in the price index for agricultural exports rose from +7.0 percent to +20.4 percent. So, we see that, in general, increases in both prices paid and prices received in international trade were noticably smaller in recent months. On the other hand, if you are a farmer, in the past year you were experiencing a brisk pick up in the overseas demand for your products.

Byline: Lafferty (MF Merlin)