Tag Archives: Imports

Why This Counts: What are the U.S. Import and Export Price Indexes?

Cargo ship in port at nightThe U.S. Bureau of Labor Statistics provides data of all kinds for workers, jobseekers, students, employers, investors, and policymakers. Most BLS measures provide information on U.S. labor markets and living conditions: the national labor force participation rate; the unemployment rate in Illinois; the Consumer Price Index for Anchorage, Alaska. But did you know we also provide international data? With a focus on global trade, we publish the U.S. import and export price indexes.

What are import and export prices indexes?

Import and export price indexes describe changes in the prices for goods and some services exchanged between people and businesses in the United States and trading partners around the world. BLS collects prices of imported and exported products from businesses and calculates price trends monthly.

A brief history of international prices:

  • BLS published the first import and export price indexes in 1973.
  • We published the first all-goods price indexes for imports in 1983 and for exports in 1984.
  • Monthly publication launched in 1989 and expanded in 1994.
  • Import price indexes by country of origin began publication in 1992.

What is an import? An export?

To measure import and export prices, we first need to define “import” and “export.” An import is any product entering the United States from a foreign country; an export goes the opposite direction. A good becomes an import or export when it crosses the border. An imported service is bought by a U.S. resident from a foreign resident, while an exported service is sold by a U.S. resident to a foreign resident.

What is a price index?

A price index measures the average change in prices for a basket of the same products over time. We measure price changes for thousands of imports and exports each month. We publish these price changes for specific products and for the specific industries and U.S trading partners that import or export the products. To learn more about price indexes, see our blog about the Producer Price Indexes.

How do we collect the data?

Like the Consumer Price Index and Producer Price Indexes, the import and export price indexes depend on the cooperation of businesses—in this case, U.S. establishments importing and exporting goods and services. Thousands of public-minded businesses voluntarily provide data through a monthly survey. With all the data we collect, we strive to minimize the burden on our respondents and protect their confidentiality and privacy.

What do import and export prices measure?

If you’ve ever taken an introductory economics course, you know markets determine price changes through supply and demand. On the most basic level, import and export price indexes measure how supply and demand affect prices for goods and services traded internationally. Let’s look at a quick example, the export price index for computers. A U.S. computer manufacturer may look at current trends to figure out short-term sales strategies. Then consider the flip side—the price index for import computers. A U.S. resident shopping for a new computer may want to research whether prices have risen or fallen over the past few months. Or that computer shopper might look at the data from the past few years to see if there is a certain time of year that prices fall. But the importance of import and export prices extends even further than individuals and companies.

  • The indexes are used to account for inflation in other official U.S. statistics like trade balances published by the Census Bureau and the international accounts for U.S. Gross Domestic Product published by the Bureau of Economic Analysis.
  • When economists calculate measures of U.S. industries’ competitiveness compared with our trading partners, they use import and export price indexes.
  • A change in the import price index can tilt domestic inflation in the same direction.
  • When exchange rates between currencies rise and fall, the indexes can show how much of that change is “passed-though” to an import or export price.

Why do import and export price indexes data matter?

The data matter because U.S. consumers depend on imports! Simply put, many of the products sold to consumers in the United States are imported from abroad. And there is a good chance what you buy for your home depends on import prices. But consumers aren’t the only ones who care about these prices. U.S. producers sell abroad and buy from overseas. Producers care about import prices because many imports to the United States go into the goods and services produced domestically. U.S. auto manufacturers care about the prices of auto parts they import from abroad. Producers who export goods to foreign countries benefit from having access to price information. Knowing trends in export agricultural prices, for example, could influence what crops a U.S. grower chooses to produce.

Want to find out more?

Worth a Thousand Words? Announcing Ready-to-Go Interactive Graphics with BLS News Releases

Last spring I wrote about how we’ve been using more and better charts and maps to help you understand our statistics. Today I’m excited to tell you about a new set of graphical tools to make our news releases more illuminating at the moment of their posting.

We want everyone to be able to “see” quickly what’s in the hundreds of news releases we publish every year—on price trends, pay and benefits, productivity, employment and unemployment, job openings and labor turnover, and other topics. The format of these news releases still typically includes a few pages of text to explain the latest information about a topic. Most releases also include tables with lots and lots of numbers. These news releases have served our customers well for decades, but we’re always looking for ways to improve our products and services. Many of you have told us that adding charts and maps to our news releases would make them more useful and easier to understand. In recent years we’ve added charts and maps to many news releases, but most releases only include a couple of these visualizations. We are committed to do more.

We’re adding a cool new feature to many of our releases. Starting last fall, we began posting sets of interactive graphics to complement some of our most widely read economic reports. We’ll update these graphics with each new release of data. Our monthly news release on import and export price indexes was the first to have a set of interactive graphics. The quarterly Employment Cost Index news release was the next to include interactive graphics. Most recently, when we published the Employment Situation—often our most watched news release—on January 8, we presented a lengthy new set of charts from our monthly surveys of households and nonfarm establishments. Over the coming months, we will add chart sets for more releases.

I’ve used the word “interactive” to describe these charts. Let me explain what that means. Interactive features let you choose what you want to see. For example, our chart showing nonfarm employment levels over the last 20 years starts out with two lines, one for total nonfarm employment and the other for total private employment. The legend above the chart lets you turn categories on or off, simply by clicking on the industry titles in the legend. If you want to look at, say, the last 10 years instead of the last 20, you can change the time period by clicking and dragging within the chart. If you hover your pointer over the lines in the chart, you can see the exact values for individual months.

industry-employment

In the coming months we will continue to develop interactive graphics for the rest of our most watched monthly and quarterly news releases. Our goal over the next few years is to have interactive graphics to accompany all or nearly all of our news releases. I am thrilled to have this great set of tools to serve our customers better.

Take a look. I know you’ll agree with me that the BLS staff have done a fine job crafting these ready-to-go visualizations. Whatever BLS statistics you follow, I hope you find many uses for them and send us a lot of comments and suggestions!

 

 

President’s 2016 budget would fund data on export prices and poverty measures

A few weeks ago President Obama presented his fiscal year 2016 budget request to Congress. That budget proposes $632.7 million in funding for BLS, an increase of $40.5 million over our fiscal year 2015 funding. The 2016 budget proposes new funding to help BLS meet some important data needs. I have asked David Friedman, the acting Associate Commissioner for Prices and Living Conditions, to explain how we plan to use the proposed funding to improve prices and consumer spending information.

The President’s 2016 budget asks Congress to restore funding that would let BLS continue producing and publishing export price indexes. These indexes measure the price change of goods and services U.S. firms sell to foreign buyers. In fiscal year 2014, we announced plans to stop publishing export price indexes because of reduced funding. However, before we carried out the planned cuts, the Administration looked for and found other temporary funding sources. This money is only enough to produce and publish export price indexes until September 30, 2015. This budget proposal would allow us to continue producing and publishing export price indexes in fiscal year 2016 and beyond.

BLS publishes import and export price indexes, and both are critical for understanding how our nation’s economy connects to the world economy. Export price indexes help policymakers and businesses understand trends in trade balances and how well U.S. firms compete in international markets. The Bureau of Economic Analysis uses export price indexes to estimate real Gross Domestic Product, which measures all the goods and services the nation produces. BLS measures of productivity and costs also rely on export price indexes. A recent Beyond the Numbers article showed that no other data sources are substitutes for export price indexes.

The President’s 2016 budget also proposes funds for BLS to produce spending measures that would help the U.S. Census Bureau measure poverty more accurately. Poverty measures are essential for understanding hardship and prosperity in our economy. Other federal agencies use these measures to improve conditions for the poor. The official U.S. poverty measure began in the 1960s and has not changed substantially since then. Many observers have criticized the measure for several flaws. In particular, it does not account for many government aid programs. The alternative poverty measures the Census Bureau would produce from BLS spending data would not replace the official measure; instead they would provide a broader view of hardship. If Congress funds this proposal, it would allow us to:

  1. Release consumer spending data more quickly to help the Census Bureau produce alternative poverty measures each year.
  2. Add questions to the Consumer Expenditure Survey on topics such as school breakfasts and lunches and help paying for home heating and other household expenses.
  3. Continue research to improve how federal agencies measure poverty.

If Congress funds the BLS proposal in the coming year, it would allow us to strengthen our partnership with the Census Bureau on this important national issue. Without the funding, our ability to be a full participant in development and maintenance of the supplemental poverty measure is not possible.

Geographic profiles report and two new Beyond the Numbers articles

This week BLS published Geographic Profile of Employment and Unemployment, 2012. This annual publication is a collection of tables that presents estimates for census regions and divisions, the 50 states and the District of Columbia, 54 large metropolitan areas, 22 metropolitan divisions, and 41 principal cities. Geographic Profile provides the most current source of information on the demographic and economic characteristics of the labor force in subnational areas, from the same survey as the official labor force estimates for the United States as a whole.

We also published two new editions of Beyond the Numbers this week. The first examines the reemergence of the United States as a global petroleum producer. In May 2013, domestic production of petroleum in the United States surpassed imports for the first time since January 1997. The fact that domestic production has outpaced imports is the culmination of trends that have been in motion for a number of years. Imports of petroleum have been declining over the last 7 years, while domestic production has undergone a significant revival. U.S. production has grown as a result of new technologies, such as horizontal drilling and hydraulic fracturing, which have been used to extract petroleum and gas from shale deposits once viewed as unprofitable. Coinciding with the large increase in domestic petroleum production in the United States was a decline in the domestic consumption of petroleum. The amount of petroleum consumed in 2012 was the smallest since 1996.

The second edition of Beyond the Numbers published this week looks at the highlights of the 2013 Producer Price Index (PPI) user survey. Survey results reveal that PPI data users are satisfied with the quality of the data, the level of detail presented, and the customer service offered whenever they contact PPI staff. Although these results are very gratifying, we’re not resting on our laurels. The user survey provides important insights into how we might improve the PPI and where we should focus our efforts to expand and improve our measures, as funds and other resources permit.

Five new editions of Beyond the Numbers

This has been a busy week for BLS publications, with five new editions of Beyond the Numbers. The first edition looks at how steadily growing global demand for grain crops has generated higher crop prices and increased demand for fertilizers, particularly imported fertilizers. This article looks at the complex and interesting interactions among grain production and prices, natural gas production and prices, and the production of fertilizers and their domestic and import prices.

Trends in natural gas prices were the focus of the second edition of Beyond the Numbers this week. Specifically the article examines how the application of horizontal hydraulic fracturing—commonly called fracking—in shale rock formations has boosted U.S. production of natural gas and has contributed to a 57-percent decline in producer prices for natural gas from 2007 to 2012.

The third edition of Beyond the Numbers this week examines the methods used in the Consumer Price Index to estimate the cost of shelter services for owner-occupied housing. Estimating the cost of housing is complex because a house is a capital asset that provides a flow of services over a substantial period of time, not just a one-time consumption item. Starting in January 1983 the Consumer Price Index for All Urban Consumers began using a “rental equivalence” approach to estimate housing costs. This method measures the rate of change in the amount a homeowner would need to pay to rent a similar house on the open market. It is based on actual market rents collected from a sample of renter-occupied housing units that are identified to represent owner-occupied housing. The article discusses this and other changes in the methods used to estimate housing costs over the past 30 years.

The compensation of workers in the trade, transportation, and utilities industries was the focus of another edition of Beyond the Numbers. These industries employed 25.6 million workers in 2012: 14.9 million in retail trade, 5.6 million in wholesale trade, 4.4 million in transportation and warehousing, and 0.6 million in the utilities industries. The article looks at wages and employee benefits in these industries. Private industry compensation costs for trade, transportation, and utilities workers averaged $24.31 per hour worked in December 2012. Wages and salaries averaged $17.12 per hour and benefits averaged $7.19. Employer compensation costs for trade, transportation, and utilities workers vary quite a bit by industry. Costs fluctuate for a number of reasons such as part-time and full-time status, job skills, and union representation. In December 2012, total compensation costs per employee hour worked ranged from $17.64 for workers in retail trade to $59.26 for workers in utilities.

Finally, for pet lovers we have an article that examines how much you spend on your pets. Nearly three-quarters of U.S. households own pets. There are about 218 million pets in the United States, not counting several million fish. Pet ownership crosses many demographic boundaries, with Americans of different ages and levels of wealth reporting spending on pets. Americans spent approximately $61.4 billion in total for the care and feeding of their pets in 2011. On average, each U.S. household spent just over $500 on pets. This amounts to about 1 percent of total spending per year for the average household.