Import export prices down

The U.S. Import Price Index fell for the third consecutive month, decreasing 4.7 percent in October and 10.6 percent over the past three months. Export prices declined 1.9 percent in October, the third consecutive monthly decrease.

The declines in import prices have been driven by petroleum prices; oil prices plunged 16.7 percent in October after decreasing 10.2 percent and 9.7 percent, respectively, in September and August. However, non-petroleum import prices also have declined for three consecutive months.

On the export price side, the 1.9 percent drop in October was the largest over-the-month decline reported in the nearly-20-year history of the monthly measure. The price index for agricultural exports fell 8.7 percent in October, the second decline in the past three months. The October drop was led by falling prices for soybeans, corn, and wheat.

Nonagricultural prices fell for the third consecutive month, declining 1.2 percent in October following decreases of 0.9 percent and 0.7 percent, respectively, in September and August. The October decline was the largest one-month drop for the index and was led by a drop in export prices for nonagricultural industrial supplies and materials including fuels, metals, and chemicals. The next international price report will be released December 11. (BLS)

U.S. retail and food services sales for October were $363.7 billion, a decrease of 2.8 percent from the previous month and 4.1 percent (±0.7%) below October 2007. Total sales for the August through October 2008 period were down 1.3 percent from the same period a year ago.

Business volume--the combined value of distributive trade sales and manufacturers’ shipments--for September was $1,164.3 billion, down 2.0 percent from August. Inventories edged down and the total business inventories/sales ratio at the end of September was 1.29. the I/S ratio has risen for the past 3 months. The retail sales advance for November and the business sales and inventories report for October are scheduled to be released December 12. (CEN)

The cumulative interpretation of these three reports is of weakening economic activity, both in terms of volume, and in terms of pricing power. While falling oil prices may be of some help to consumers, the overall declines in prices paid to exporters are worrisome. Likewise, declines in business sales, although perhaps also reflecting some pricing weakness, are not a good sign.