Import Prices Dip 0.5%

The prices of imported goods -- particularly, petroleum products -- fell faster than export prices in October, according to new data, tilting the trade balance in favor of the U.S. and helping to ease inflationary concerns.

The Labor Department reported Wednesday that its Import Price Index fell 0.5% in October, after a revised 1.2% rise the previous month. It's the first decline in the index since April.

Most of October's index decline was attributed to the 3.2% drop in the price of oil imports, which had risen 11% the month before. Still, petroleum prices remain 43% higher than a year ago.

Import prices for capital and consumer goods as well as for food and beverage have continued to ease, however. The capital goods index decreased 0.4%, the sixth consecutive month without an increase. Capital goods prices have come down 2.0% over the past 12 months. The indices measuring import prices of consumer goods and food and beverage products each fell 0.1% in October.

The dollar's strength against Europe's new single currency also helped keep down the cost of imports. European Union import prices fell 0.9% in October -- the largest dip since March 1997 -- reflecting the continued decline in the value of the euro against the U.S. dollar.

The prices of most U.S. export categories actually fell slightly in October, but were offset by a 0.7% gain in agricultural exports.

Despite last month's decline in import prices, David Ingram, analyst at Economy.com, pointed out that import prices have been outpacing export prices by nearly a 4-to-1 pace over the last 12 months. He expects the trend to reverse in 2001 as petroleum import prices continue to ease back from the decade-high prices reached earlier this fall.