Prices fall due to economic slowdown

New data reflects worsening economic conditions. The data shows that slowing economy and credit squeezed consumer continue to put downward pressure on prices.

In a press release, the department of labor reported today that the U.S. Import Price Index fell for the fourth consecutive month, decreasing 6.7 percent in November as falling prices for both petroleum and non-petroleum imports contributed to the decline.
Export prices declined 3.2 percent in November, the fourth consecutive monthly decrease.

Import Goods

Import prices fell 6.7 percent in November after decreases of 5.4 percent, 3.5 percent, and 3.1 percent in October, September, and August, respectively. The November decline was the largest one month drop since the index was first published monthly in December 1988 and the 17.4 percent decrease over the past four months was the largest four-month decline since the index was first published in September 1982. Import prices decreased 4.4 percent for the year ended in November; in contrast, prices for imports increased 21.4 percent from July 2007 to July 2008. The four-month decline in import prices was largely driven by falling petroleum prices, which decreased 25.8 percent in November after declining 19.8 percent, 11.2 percent, and 9.8 percent, respectively, in October, September, and August. The November drop in petroleum prices was the largest monthly decline since the index was first published monthly in December 1988 and the 52.3 percent decrease over the past four months was the largest four-month decline since the index was first published in June 1982. For the November 2007-2008 period, petroleum prices fell 29.0 percent

The price index for non-petroleum imports fell 1.8 percent in November, the largest decrease since the index was first published monthly in December 1988. Despite the recent declines, the index increased 2.4 percent over the past year. The November decrease was led by a 5.2 percent decline in prices for non petroleum industrial supplies and materials, the largest one-month drop for that index since a 5.3 percent decrease in April 2003. Lower prices for metals drove the November decline in non petroleum industrial supplies and materials prices. Falling prices for foods, feeds, and beverages, down 5.0 percent, also contributed to the decrease in non petroleum prices.
Finished goods prices decreased as well. The price indexes for capital goods, automotive vehicles, and consumer goods fell 0.4 percent, 0.6 percent, and 0.3 percent, respectively, in November, paralleling the recent appreciation of the dollar.

Export Goods

Export prices fell 3.2 percent in November, the largest one-month decline since the index was first published monthly in December 1988. The decrease followed drops of 2.0 percent, 0.8 percent, and 1.6 percent in October, September, and August, respectively. The 7.4 percent decrease over the past four months was the largest four-month decline since the index was first published in September 1983.
As a result of the recent downward trend, export prices fell 0.2 percent over the past 12 months. The price index for agricultural exports fell 7.0 percent in November and 23.0 percent over the past four months, the largest four-month drop since the index was first published in March 1985. The November drop was led by falling prices for meat, corn, soybeans, and wheat. Agricultural prices, which had risen
39.7 percent from July 2007 to July 2008, fell 2.8 percent for the year ended in November.

Nonagricultural prices fell for the fourth consecutive month, declining 2.9 percent in November following decreases of 1.3 percent, 0.9 percent, and 0.7 percent, respectively, in October, September, and August. The November decline was the largest one-month drop for the index since first being published monthly in December 1988 and was led by an 8.2 percent drop in prices for nonagricultural industrial supplies and materials. That decline was driven by lower prices for fuels, chemicals, and metals. The price index for nonagricultural exports was unchanged over the past year.

The major finished goods price indexes also decreased in November. Prices for consumer goods, capital goods, and automotive vehicles fell 0.9 percent, 0.2 percent, and 0.1 percent, respectively.

Argo Insurance is the leading provider of custom risk management solutions for the trucking industry. We offer bobtail, non trucking liability, physical damage, trucking liability and cargo insurance to owner operators and fleet owners. For a customized solution for your trucking company contact us at 847-296-4600 or visit us at www.argoins.com