By Brai Odion-Esene and Ian Mckendry

WASHINGTON (MNI) – The U.S. import price index fell for the second
straight month in June, down 1.3% from May’s revised 0.5% drop, dragged
down by a broad-based decline in both fuel and nonfuel prices, the
Bureau of Labor Statistics reported Wednesday.

This was the index’s largest decline since it fell by 1.3% in
January of last year. According to the BLS, May and June are the first
monthly declines since December 2008 and January 2009.

The export price index also fell in June, the BLS said, after
rising for three consecutive months.

Import prices rose 4.5% year-over-year for June after being up 8.7%
y/y in May.

June fuel import prices also fell for the second straight month,
down 4.0% following a 4.1% drop in May. This was led by a 4.4% decline
in petroleum import prices — the largest monthly decrease also since
January 2009 (-4.6%). Bucking the trend, natural gas import prices rose
by 1.5% in June to partially offset the drop in petroleum prices.

Year-over-year, petroleum import prices rose 11.7% and natural gas
prices rose 13.8%, pushing overall fuel prices up 11.6% for the same
period.

Nonfuel import prices fell 0.6% in June, the first monthly decline
since July 2009 and the largest since they fell 0.6% in March 2009. Over
the past 12 months, nonfuel import prices rose 2.8%. Non-petroleum
imports fell by 0.5% in June, also the largest drop since March 2009
(-0.8%).

The BLS said the main contributor to the decrease in nonfuel import
prices was the 1.5% downturn in nonfuel industrial supplies and
materials, with foods (-1.7%), capital goods (-0.3%) and consumer goods
excluding auto vehicles (-0.4%) also contributing to the overall June
decline.

By region, prices for imports from China fell 0.3%, prices for
imports from the European Union were down 0.9% in June, the largest
decline since a 1.5% drop in December 2008.

Import prices from Mexico fell by 0.8%, Canada down 1.6%; the
largest since February 2009.

As mentioned earlier, the export price index fell following three
consecutive monthly increase, declining 0.2% in June. The BLS attributed
most of the decrease to the 0.2% drop in non-agricultural export prices,
although agricultural exports prices also fell 0.1% in June.

Export prices rose 4.3% year-over-year after being up 5.7% y/y in
May.

The report, the only one of its kind done in or out of government,
itself is largely but not entirely made up of monthly price changes
submitted voluntarily by firms, with some items priced quarterly. The
BLS also makes quality adjustments to the price quotes if the product
has been improved.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,M$U$$$,MT$$$$]