Bureau of Labor Statistics released today import and export price indexes. Import prices recorded no change in December while export prices increased 0.4 percent after an increase of only 0.1 percent the previous month.
No change in import prices was actually an increase over the previous months when decreases of 0.9 percent in November and 0.6 percent in October were recorded. Decreasing fuel prices led to the decrease in at import prices in October and November however December saw an upturn in fuel prices that with an increase in natural gas prices that more than offset the small drop in petroleum prices overall.
Nonfuel import prices actually edged down for December but were offset by the 0.1% increase in natural gas prices. Agricultural exports led the way for the increase in overall export prices with an increase of 0.4% for December. Nonagricultural exports increased 0.3% for December. Overall for the past 12 months agricultural exports decreased 6.3% while nonagricultural exports decreased 0.5%.
The increase in export prices was good news for the economy as a whole while the decrease in import prices also help foster better economic conditions. Unfortunately, the increase in export prices and decrease in import prices were temporary and only covered the single month of December. Overall during the last 12 months all imports are down 1.3% while all exports are down 1.0% which leads to the indication that internationally the recession is still not in a robust recovery.
Home prices have continued to go up during the last several months while interest rates have also gone up during that period. The Bureau of Labor Statistics released last week that the unemployment rate had finally declined below the 7% mark to 6.7% in December while total nonfarm payroll employment edged up 74,000 new jobs. So, while new jobs are being created and import and export prices are remaining down the US economy appears to be making a solid, albeit, slow recovery.
About the author: Fred Chamberlin was a senior loan officer with Guild Mortgage Company in Oak Harbor. He was in the mortgage origination business for over 20 years and in the lending business for over 30 and authors a number of mortgage related blogs.