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Prefatory Note The attached document represents the most complete and accurate version available based on original files from the FOMC Secretariat at the Board of Governors of the Federal Reserve System. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act. Content last modified 04/01/2015. Class III FOMC - Internal (FR) December 11, 2009 CURRENT ECONOMIC AND FINANCIAL CONDITIONS Supplemental Notes Prepared for the Federal Open Market Committee by the staff of the Board of Governors of the Federal Reserve System Contents The Domestic Nonfinancial Economy ........................................................ 1 Retail Sales and Consumer Sentiment ............................................. 1 Business Inventories ........................................................................ 1 Federal Government......................................................................... 2 Exhibits Retail Sales....................................................................................... 3 Michigan Survey of Consumer Attitudes ........................................ 4 Nonfarm Inventory Investment ........................................................ 5 Federal Government Indicators........................................................ 6 The Domestic Financial Economy .............................................................. 2 Exhibits Selected Financial Market Quotations ............................................. 7 Commercial Bank Credit ................................................................. 8 The International Economy ........................................................................ 9 Trade in Goods and Services ........................................................... 9 Prices of Internationally Traded Goods ......................................... 12 Exhibits Trade in Goods and Services ........................................................... 9 U.S. International Trade in Goods and Services (chart) ................ 10 U.S. Exports and Imports of Goods and Services (table) .............. 11 Prices of U.S. Imports and Exports (chart) .................................... 13 Prices of U.S. Imports and Exports (table) .................................... 14 -ii- Supplemental Notes The Domestic Nonfinancial Economy Retail Sales and Consumer Sentiment Nominal retail sales rose 1.3 percent in November, and revisions to the two previous months were largely offsetting. Sales in the retail control category, which excludes sales at auto dealers and building material and supply stores, and are the component of overall retail sales used by the BEA in constructing the national accounts, moved up 0.5 percent. The gains were fairly widespread across establishment types but were especially robust at general merchandise stores, food and beverage stores, electronics and appliance stores, and nonstore retailers. Folding in our forecast for November PCE prices, we estimate that real PCE control rose 0.4 percent last month, the sixth consecutive monthly gain. The Reuters/University of Michigan index of consumer sentiment moved up in early December, as assessments of current conditions were more favorable than in November. The December sentiment reading remained within the range of values observed over the past 6 months. The preliminary survey results for median inflation expectations of households in the Reuters/Michigan sample—both over the next 12 months and over the next 5 to 10 years—moved down noticeably. At 2.1 percent and 2.6 percent, respectively, these early December readings were the lowest since March. Business Inventories Folding in a small decline in the book-value of retail inventories (excluding motor vehicles and parts), the combined book-value of inventories in the manufacturing and trade sector (excluding motor vehicles and parts) rose at an annual rate of $21 billion in October. The increase was the first in more than a year, suggesting some slowing in the pace of real inventory liquidation may be under way. Of course, because changes in book-value inventories can be heavily influenced by price changes that lead to a revaluation of existing stocks, these book-value data can differ substantially from real inventory changes. Despite the apparent restocking in October, businesses likely continued to make progress in better aligning their inventories with sales: The ratio of book-value inventories to sales (excluding motor vehicles) edged down further in October. -1- -2- Federal Government Based on data for defense spending in the Monthly Treasury Statement for November, real defense purchases declined last month following a drop in October. The unified federal budget remained wide over the first two months of fiscal 2010. Receipts were 13 percent lower in October-November than in the same period last year. Federal spending in October-November declined 4 percent relative to the same period a year ago, primarily because of a marked decrease in outlays for the TARP. Excluding the TARP payments, federal spending increased in the first two months of fiscal 2010 relative to a year earlier. The Domestic Financial Economy (Exhibits attached) -3Real Personal Consumption Expenditures (Percent change from preceding comparable period) Category Q1 Total real PCE1 Motor vehicles Goods ex. motor vehicles Services Ex. energy Memo: Real PCE control2 Nominal retail control3 2009 Q2 Annual rate Q3 Sept. 2009 Oct. Nov. Monthly rate .6 -.9 3.0 -.6 .3 n.a. 9.6 -2.8 -.3 -.2 -6.3 -5.9 .2 .7 53.7 3.4 1.0 1.1 -29.8 .7 .2 .1 8.9 .0 .2 .1 5.1 .4 n.a. n.a. 1.3 2.6 -2.5 -2.8 3.3 1.4 .7 .6 .2 .3 .4 .5 1. The values for Q3, September, October, and November are staff estimates based on available data. 2. Durables excluding motor vehicles, nondurables excluding gasoline, and food services. 3. Total sales less outlays at building material and supply stores, automobile and other motor vehicle dealers, and gasoline stations. n.a. Not available. Source: U.S. Department of Commerce, Bureau of Economic Analysis. Change in Real PCE Goods Percent 0.8 0.8 0.6 0.6 2.0 0.4 0.4 Percent 2.8 2.8 NBER peak Nov. 0.2 -0.0 -0.2 1.2 0.2 0.4 -0.2 1.2 Nov. -0.0 6-month moving average 2.0 6-month moving average -0.4 -1.2 0.4 -0.4 Monthly -1.2 -0.4 -0.4 -0.6 -0.6 -2.0 -2.0 -0.8 -0.8 -2.8 -2.8 2006 2007 2008 2009 2010 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Note: Shaded bars indicate periods of business recession as defined by the National Bureau of Economic Research (NBER). The NBER peak is the last business cycle peak as defined by the NBER. Source: U.S. Department of Commerce, Bureau of Economic Analysis. Change in Real PCE Services Percent 0.5 0.5 Percent 0.6 NBER peak 0.4 0.4 0.3 0.2 0.2 0.1 0.0 0.6 0.3 0.2 6-month moving average 0.1 6-month moving average Oct. 0.0 -0.1 0.4 Oct. 0.2 0.0 0.0 -0.1 0.4 -0.2 -0.2 Monthly -0.2 -0.4 2006 2007 2008 2009 2010 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Note: Shaded bars indicate periods of business recession as defined by the National Bureau of Economic Research (NBER). The NBER peak is the last business cycle peak as defined by the NBER. Source: U.S. Department of Commerce, Bureau of Economic Analysis. -0.2 -0.4 -4- December 11, 2009 Reuters/University of Michigan Survey of Consumers Indexes of consumer sentiment (Not seasonally adjusted) 2009 May June July Aug. Sept. Oct. Nov. Dec.P Composite of current and expected conditions1 Current conditions1 Expected conditions1 68.7 67.7 69.4 70.8 73.2 69.2 66.0 70.5 63.2 65.7 66.6 65.0 73.5 73.4 73.5 70.6 73.7 68.6 67.4 68.8 66.5 73.4 79.1 69.7 Personal financial situation Now compared with 12 months ago2 Expected in 12 months2 61 114 67 121 70 110 58 111 69 115 69 117 63 112 72 114 75 88 69 86 69 73 69 80 88 91 81 76 70 83 80 84 Appraisal of buying conditions Cars Large household appliances2 Houses 132 113 162 139 121 157 131 111 147 139 113 156 126 120 156 124 120 156 126 114 154 132 132 154 Expected unemployment change - next 12 months 132 133 136 124 110 120 124 113 Prob. household will lose a job - next 5 years 27 27 26 27 27 24 26 25 Expected inflation - next 12 months Mean Median 3.2 2.8 3.9 3.1 3.6 2.9 3.0 2.8 2.8 2.2 3.2 2.9 3.1 2.7 3.1 2.1 Expected inflation - next 5 to 10 years Mean Median 3.1 2.9 3.2 3.0 3.4 3.0 3.1 2.8 3.2 2.8 3.2 2.9 3.2 3.0 3.1 2.6 Category Expected business conditions Next 12 months2 Next 5 years2 Note. Figures on financial, business, and buying conditions are the percent reporting ’good times’ (or ’better’) minus the percent reporting ’bad times’ (or ’worse’), plus 100. Expected change in unemployment is the fraction expecting unemployment to rise minus the fraction expecting unemployment to fall, plus 100. P Preliminary. 1. Feb. 1966 = 100. 2. Indicates the question is one of the five equally-weighted components of the index of sentiment. Consumer sentiment 1966 = 100 120 1985 = 100 170 150 6 Percent 6 110 Reuters/Michigan (right scale) 100 130 90 110 5 Median, 5 to 10 years ahead 5 4 4 80 90 Dec. P 70 70 60 Conference Board (left scale) Nov. 50 3 Dec. 2 50 P 3 2 Median, 12 months ahead 1 30 10 Expected inflation (Reuters/University of Michigan) 1 40 2002 2004 P Preliminary. 2006 2008 2010 30 0 2002 2004 P Preliminary. 2006 2008 2010 0 -5Nonfarm Inventory Investment (Billions of dollars; seasonally adjusted annual rate) 2009 Measure and sector Q1 Q2 Q3 -114.9 -63.6 -51.3 e -163.1 -48.1 -115.1 -140.3 -4.3 e -135.9 Manufacturing and trade ex. wholesale and retail motor vehicles and parts Manufacturing Wholesale trade ex. motor vehicles & parts Retail trade ex. motor vehicles & parts -49.3 -28.9 -8.8 -11.6 -110.9 -39.8 -52.5 -18.6 -127.2 e -115.3 -53.3e -46.6 -51.9 e -52.7 e -22.0 -16.0 -164.2 e -82.0 e -51.1e e -31.1 Book-value inventory investment (current dollars) Manufacturing and trade ex. wholesale and retail motor vehicles and parts Manufacturing Wholesale trade ex. motor vehicles & parts Retail trade ex. motor vehicles & parts -143.2 -77.3 -47.3 -18.6 -150.2 -63.6 -62.9 -23.7 -137.1 -62.2 -50.7 -24.2 -136.2 -74.9 -34.5 -26.8 Real inventory investment (chained 2005 dollars) Total nonfarm business Motor vehicles Nonfarm ex. motor vehicles Aug. Sept. Oct. ... ... ... ... ... ... ... ... ... -136.4 -56.4 -54.1 -25.9 n.a. n.a. n.a. n.a. 21.4 21.1 8.9 -8.7 n.a. Not available. ... Not applicable. e Staff estimate of real inventory investment based on revised book-value data. Source: For real inventory investment, U.S. Dept. of Commerce, Bureau of Economic Analysis; for book-value data, Census Bureau. ISM Customers’ Inventories: Manufacturing Inventory Ratios ex. Motor Vehicles Months 1.9 1.8 1.9 60 Index 60 1.8 Staff flow-of-goods system 55 1.7 55 50 50 45 45 40 40 1.7 Oct. 1.6 1.6 1.5 1.5 1.4 1.4 1.3 1.3 Oct. 1.2 1.2 Census book-value data 1.1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2002 2004 2006 2008 Note: Flow-of-goods system covers total industry ex. motor vehicles and parts, and inventories are relative to consumption. Census data cover manufacturing and trade ex. motor vehicles and parts, and inventories are relative to sales. Source: Census Bureau; staff calculation. Nov. 1.1 35 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2002 2004 2006 2008 Note: A number above 50 indicates inventories are "too high." Source: Institute for Supply Management (ISM), Manufacturing ISM Report on Business. 35 -6- Federal Government Indicators Total Real Federal Purchases Real Defense Spending Percent change, annual rate 20 Current 4-quarter moving average 15 20 15 10 Billions of chained (2005) dollars 700 Unified (monthly) NIPA (quarterly) 650 Q3 700 650 Nov. 10 600 600 5 5 550 550 0 0 500 500 -5 -5 450 450 -10 400 Q3 -10 2004 2005 2006 2007 2008 2009 Note: NIPA measure. Source: U.S. Department of Commerce, Bureau of Economic Analysis. 2004 2005 2006 2007 2008 2009 Note: Nominal unified defense spending is seasonally adjusted and deflated by BEA prices. NIPA defense purchases exclude consumption of fixed capital. Source: Monthly Treasury Statement; U.S. Department of Commerce, Bureau of Economic Analysis. Unified Outlays and Receipts Unified Budget Deficit 4 Percent of GDP Billions of dollars Billions of dollars (right axis) Percent of GDP (left axis) 2 400 600 -2 300 20 Outlays Receipts 15 0 0 Percent change from year earlier 20 10 -300 15 10 5 5 Nov. -4 -600 0 -6 -900 -5 -5 -8 -1200 -10 -10 -1500 -15 -15 -1800 -20 -10 -12 Nov. 2000 2002 2004 2006 2008 Note: Adjusted for payment-timing shifts; cumulative deficit over the previous 12 months. Source: Monthly Treasury Statement. Percent of GDP Oct. - Nov. 2009 55 Function or source 50 50 Nov. 45 45 40 40 35 35 30 2000 2002 2004 2006 Source: Monthly Treasury Statement. -20 Recent Unified Federal Outlays and Receipts Federal Debt Held by the Public 55 2000 2002 2004 2006 2008 Note: Adjusted for payment-timing shifts; based on cumulative outlays or receipts over the previous 12 months. Source: Monthly Treasury Statement. 0 2008 30 Billions of dollars Outlays National defense Major transfers1 Other primary spending Net interest 566 118 318 94 36 -4.2 .8 17.0 -41.3 -14.0 Receipts Individual income and payroll taxes Corporate income taxes Other 269 236 -13.1 -14.1 -7 39 ... 20.5 -297 ... Deficit (-) Percent change* Note: Adjusted for payment-timing shifts. * Relative to same year-earlier period. 1. Includes Social Security, Medicare, Medicaid, and income security programs. ... Not applicable. Source: Monthly Treasury Statement. -7Selected Financial Market Quotations (One-day quotes in percent except as noted) 2008 Change to Dec. 10 from selected dates (percentage points) 2009 Instrument Sept. 12 Sept. 22 Nov. 3 Dec. 10 2008 Sept. 12 2009 Sept. 22 2009 Nov. 3 2.00 .13 .13 .13 -1.87 .00 .00 1.46 1.80 .11 .20 .06 .17 .02 .15 -1.44 -1.65 -.09 -.05 -.04 -.02 Commercial paper (A1/P1 rates)2 1-month 3-month 2.39 2.75 .18 .21 .16 .18 .15 .18 -2.24 -2.57 -.03 -.03 -.01 .00 Large negotiable CDs1 3-month 6-month 2.79 3.09 .25 .35 .22 .32 .22 .30 -2.57 -2.79 -.03 -.05 .00 -.02 Eurodollar deposits3 1-month 3-month 2.60 3.00 .40 .55 .30 .45 .32 .45 -2.28 -2.55 -.08 -.10 .02 .00 Bank prime rate 5.00 3.25 3.25 3.25 -1.75 .00 .00 Intermediate- and long-term U.S. Treasury4 2-year 5-year 10-year 2.24 2.97 3.93 .99 2.44 3.74 .93 2.37 3.73 .75 2.19 3.69 -1.49 -.78 -.24 -.24 -.25 -.05 -.18 -.18 -.04 U.S. Treasury indexed notes5 5-year 10-year 1.33 1.77 1.11 1.69 .70 1.48 .50 1.43 -.83 -.34 -.61 -.26 -.20 -.05 Municipal general obligations (Bond Buyer)6 4.54 4.20 4.39 4.19 -.35 -.01 -.20 4.26 4.36 6.62 7.22 10.66 3.67 4.12 5.11 6.36 9.90 3.62 4.06 5.12 6.25 9.48 3.61 3.92 5.02 6.06 9.38 -.65 -.44 -1.60 -1.16 -1.28 -.06 -.20 -.09 -.30 -.52 -.01 -.14 -.10 -.19 -.10 5.78 5.03 5.04 4.52 4.98 4.47 4.81 4.24 -.97 -.79 -.23 -.28 -.17 -.23 Short-term FOMC intended federal funds rate Treasury bills1 3-month 6-month Private instruments 10-year swap 10-year FNMA7 10-year AA8 10-year BBB8 10-year high yield8 Home mortgages (FHLMC survey rate) 30-year fixed 1-year adjustable Record high Change to Dec. 10 from selected dates (percent) 2009 Stock exchange index Level Dow Jones Industrial S&P 500 Composite Nasdaq Russell 2000 D.J. Total Stock Index Date Sept. 22 Nov. 3 Dec. 10 Record high 2009 Sept. 22 2009 Nov. 3 14,165 1,565 5,049 856 15,807 10-9-07 10-9-07 3-10-00 7-13-07 10-9-07 9,830 1,072 2,146 621 11,083 9,772 1,045 2,057 571 10,729 10,406 1,102 2,191 595 11,296 -26.54 -29.57 -56.60 -30.43 -28.54 5.86 2.86 2.08 -4.08 1.93 6.49 5.45 6.49 4.34 5.29 1. Secondary market. 2. Financial commercial paper. 3. Bid rates for Eurodollar deposits collected around 9:30 a.m. eastern time. 4. Derived from a smoothed Treasury yield curve estimated using off-the-run securities. 5. Derived from a smoothed Treasury yield curve estimated using all outstanding securities and adjusted for the carry effect. 6. Most recent Thursday quote. 7. Constant-maturity yields estimated from Fannie Mae domestic noncallable coupon securities. 8. Derived from smoothed corporate yield curves estimated using Merrill Lynch bond data. _______________________________________________________________________ NOTES: September 12, 2008, is the last business day before Lehman Brothers Holdings filed for bankruptcy. September 22, 2009, is the day before the September 2009 FOMC monetary policy announcement. November 3, 2009, is the day before the most recent FOMC monetary policy announcement. _______________________________________________________________________ -8Commercial Bank Credit (Percent change, annual rate, except as noted; seasonally adjusted) Type of credit Level1 Nov. 2009 2007 H2 2008 H1 2009 Q3 2009 Oct. 2009 Nov. 2009 9.9 Total 2008 5.0 4.8 -5.5 -7.3 -12.0 -3.9 9,109 Loans2 Total Core To businesses Commercial and industrial Commercial real estate 10.6 9.5 4.4 5.0 3.0 3.2 -7.4 -4.7 -12.9 -9.7 -15.5 -14.4 -4.4 -6.6 6,777 6,021 19.0 9.4 16.3 6.0 14.1 3.2 -14.1 -1.6 -20.0 -5.6 -28.7 -11.5 -16.1 -10.0 1,361 1,654 To households Residential real estate Revolving home equity Closed-end mortgages Consumer Memo: Originated3 Other 5.3 5.6 5.3 6.8 6.5 18.7 -3.2 13.0 -8.0 7.1 5.6 .8 -5.4 12.9 -11.3 7.6 4.5 1.7 -2.0 6.5 -5.1 .0 -1.7 -25.4 -8.1 -5.2 -9.3 -3.4 -4.3 -37.0 -11.8 -5.1 -14.4 -2.7 -3.8 -24.8 2.2 -6.3 5.5 -7.2 -12.9 14.1 2,164 604 1,560 842 1,227 756 7.6 -5.5 28.0 6.9 16.4 -4.1 11.1 31.4 -12.0 .7 .5 1.0 10.7 20.5 -3.0 -1.6 .8 -5.4 -2.6 6.1 -16.0 2,332 1,413 919 Securities Total Treasury and agency Other4 Note: Yearly annual rates are Q4 to Q4; quarterly and monthly annual rates use corresponding average levels. Data have been adjusted to remove the effects of mark-to-market accounting rules (FAS 115) and the initial consolidation of certain variable interest entities (FIN 46). Data also account for the effects of nonbank structure activity of $5 billion or more. 1. Billions of dollars. Pro rata averages of weekly (Wednesday) levels. 2. Excludes interbank loans. 3. Includes an estimate of outstanding loans securitized by commercial banks that retained recourse or servicing rights. 4. Includes private mortgage-backed securities; securities of corporations, state and local governments, and foreign governments; and any trading account securities that are not Treasury or agency securities. Source: Federal Reserve Board. Total Loans at Commercial Banks Change in Unused Commitments Trillions of dollars Monthly 5.0 NBER peak Quarterly Basis points 30 NBER Peak 220 NBER Peak Quarterly Q4 20 4.5 200 10 4.0 Large* C&I Loan Rate Spreads* Percent 180 0 3.5 Q3 160 -10 Nov. 3.0 -20 Small** 140 2.5 -30 2.0 June Dec. 2007 June Dec. 2008 June Dec. 2009 *Large are the top 25 domestic commercial banks ranked by assets as of the last Call Report. **Small are all other domestic commercial banks. Source: Federal Reserve Board. 120 1993 1997 2001 2005 2009 Source: Call Report data, adjusted for the effects of merger and failure activity involving large thrift institutions. 1997 2000 2003 2006 2009 *The spread over market interest rate on an instrument of comparable maturity, adjusted for changes in nonprice loan characteristics. Source: Survey of Terms of Business Lending. -9- The International Economy Trade in Goods and Services The U.S. international trade deficit narrowed to $32.9 billion in October, as a large increase in exports of goods and services more than offset a moderate increase in imports. Trade in Goods and Services 2008 Nominal BOP Exports Imports Real NIPA Exports Imports Nominal BOP Net exports Goods, net Services, net Annual rate Monthly rate 2009 2009 Q1 Q2 Q3 Aug. Sept. Oct. Percent change -3.4 -7.3 -40.7 -55.4 -3.4 -6.8 -29.9 -36.4 -695.9 -840.2 144.3 -369.6 -496.1 126.5 -.8 -9.9 .3 -.5 2.8 5.6 2.6 .4 -4.1 17.0 ... -14.7 20.8 ... Billions of dollars ... ... ... ... -35.7 -47.4 11.7 -32.9 -44.8 11.9 -325.0 -461.9 137.0 24.8 37.2 -389.5 -528.6 139.0 -30.3 -42.0 11.7 n.a. Not available. ... Not applicable. BOP Balance of payments. NIPA National income and product accounts. Source: U.S. Dept. of Commerce, Bureau of Economic Analysis; Census Bureau. The value of exports of goods and services jumped up 2.6 percent in October, following a similar-sized gain in September. The October increase was widely spread across major categories of exports. Capital goods and consumer goods recorded particularly large gains. The increase in consumer goods was importantly boosted by pharmaceuticals and artwork, two of the more volatile categories of exports. -10- U.S. International Trade in Goods and Services (Quarterly) Contribution of Net Exports to Growth of Real Gross Domestic Product Trade Balance Billions of dollars, annual rate Percentage points, annual rate 0 3.5 3.0 -100 2.5 -200 2.0 October -300 1.5 -400 1.0 -500 0.5 0.0 -600 -0.5 -700 -1.0 -800 2000 2002 2004 2006 2008 -900 Selected Exports -1.5 2000 2002 2004 2006 2008 -2.0 Selected Imports Billions of dollars, annual rate Billions of dollars, annual rate 600 600 550 550 500 500 Consumer goods 450 450 400 400 Capital goods 350 300 300 250 Capital goods ex. aircraft 350 250 Industrial supplies 200 200 Industrial supplies 150 Consumer goods Oil 100 2002 2004 2006 2008 100 50 Aircraft 2000 150 50 0 Source: U.S. Dept. of Commerce, Bureau of Economic Analysis; Census Bureau. 2000 2002 2004 2006 2008 0 -11- U.S. Exports and Imports of Goods and Services (Billions of dollars; annual rate, balance of payments basis) Change1 Levels Exports of goods and services Goods exports Gold Other goods 2009 2009 Q2 Q3 Sept. Oct. 1485.6 1570.1 1600.6 1642.1 2009 2009 Q2 Q3 Sept. Oct. -3.2 84.5 43.5 41.5 984.5 1055.6 1083.6 1122.5 12.3 14.3 15.0 16.8 972.2 1041.4 1068.6 1105.7 -13.0 -1.5 -11.4 71.1 2.0 69.1 41.4 -.2 41.6 38.9 1.8 37.1 Capital goods Aircraft & parts Computers & accessories Semiconductors Other capital goods 373.1 73.4 35.5 35.0 229.2 382.2 70.4 37.4 38.5 235.9 390.1 73.5 36.5 38.2 241.9 404.6 75.8 39.6 41.6 247.7 -20.7 -5.6 -1.4 1.6 -15.3 9.1 -3.0 1.9 3.5 6.7 19.7 11.9 -.2 -.6 8.6 14.5 2.3 3.1 3.4 5.7 Automotive Ind. supplies (ex. ag., gold) Consumer goods Agricultural All other goods 66.7 249.8 144.2 101.0 37.4 86.4 283.3 150.0 99.0 40.4 90.1 297.0 153.1 97.0 41.3 95.1 300.4 165.0 98.9 41.6 -3.4 9.6 -1.8 6.6 -1.7 19.7 33.5 5.8 -1.9 3.0 2.6 16.5 5.5 -4.2 18.5 5.0 3.5 11.9 1.9 .4 501.1 514.5 517.0 519.6 9.8 13.4 2.0 2.6 1810.6 1959.7 2028.4 2037.3 -47.8 149.1 107.5 8.9 1446.5 1584.2 1652.2 1660.3 227.8 275.5 305.6 273.9 8.4 8.8 8.5 10.5 1210.3 1299.9 1338.1 1375.9 -47.2 18.9 1.1 -67.2 137.7 47.7 .4 89.6 106.0 52.5 .7 52.8 8.1 -31.7 2.0 37.8 Services exports Imports of goods and services Goods imports Oil Gold Other goods Capital goods Aircraft & parts Computers & accessories Semiconductors Other capital goods 345.6 31.4 84.4 20.4 209.4 364.2 29.1 95.0 22.2 217.9 370.9 28.8 96.0 22.6 223.5 384.4 30.9 106.2 24.4 222.9 -20.7 1.2 3.8 1.4 -27.1 18.6 -2.3 10.6 1.8 8.4 10.3 3.8 1.9 -.2 4.8 13.5 2.1 10.2 1.8 -.6 Automotive Ind. supplies (ex. oil, gold) Consumer goods Foods, feeds, beverages All other goods 126.8 178.7 419.1 81.5 58.6 178.0 190.5 422.6 81.0 63.6 196.1 200.2 424.6 80.4 65.7 201.1 208.4 436.5 82.9 62.5 -2.6 -34.2 -4.4 -.2 -5.1 51.2 11.8 3.5 -.5 5.1 19.6 11.2 6.5 -.2 5.3 5.0 8.1 11.9 2.5 -3.2 364.1 375.5 376.2 377.0 -.7 11.3 1.5 .8 11.62 53.70 11.36 66.25 12.12 69.07 10.92 68.70 -2.16 12.10 -.26 12.55 1.70 2.55 -1.20 -.37 Services imports Memo: Oil quantity (mb/d) Oil import price ($/bbl) 1. Change from previous quarter or month. Source: U.S. Dept. of Commerce, Bureau of Economic Analysis; Census Bureau. -12- The value of imports of goods and services rose only 0.4 percent in October, after shooting up 5.6 percent in September, as a robust increase in imports of non-oil goods was muted by a large decline in oil imports (both on account of lower volumes as well as a decrease in price). The increase in non-oil imports was broadbased across categories of goods. Capital goods grew strongly, supported by a jump in imports of computers. Imports of consumer goods also contributed significantly to the overall increase, led by higher imports of pharmaceutical goods. Prices of Internationally Traded Goods Non-oil imports. In November, prices of core imports rose 0.4 percent, about in line with the growth over previous months. Whereas prices for finished goods were unchanged, prices for material-intensive goods moved up 1.2 percent, with both foods and industrial supplies prices rising at rates similar to October. Taking the average of prices in October and November, core import prices have risen at an annual rate of 5.5 percent, fueled by material-intensive goods price growth of 16 percent and more mild growth in finished goods prices. Oil. The BLS price index for imported oil moved higher for the second straight month in November, rising 6.2 percent for the month as a whole. This increase came on the heels of a 2 percent increase in October, revised up a full percentage point from the previous release. Exports. Core export prices rose a brisk 1 percent in November. Material-intensive goods were solely responsible for the price growth. Prices for agricultural exports rose 3.7 percent, reversing the previous two months’ price declines. Nonagricultural industrial supplies prices rose 1.7 percent, much faster than in the two previous months. Prices for finished goods were flat on net, with a small increase in the price for consumer goods counterbalanced by a small decline in the price of capital goods excluding computers and semiconductors. In October and November on average, prices for core exported goods have risen at an annual rate of 2.9 percent. -13- Prices of U.S. Imports and Exports Merchandise Imports Categories of Core Imports 12-month percent change 12-month percent change 10 17 8 12 6 Core goods Material-intensive goods 4 7 Finished goods 2 2 0 -3 -2 -8 -4 Non-oil goods -13 -6 2000 2002 2004 2006 2008 -8 2000 Oil 2002 2004 2006 2008 -18 Natural Gas Dollars per barrel Spot West Texas Intermediate Import unit value 2000 2002 2004 2006 2008 145 135 125 115 105 95 85 75 65 55 45 35 25 15 5 Merchandise Exports Core goods Total goods 2002 2000 = 100 Dollars per million Btu Import price index (left scale) 250 30 25 200 20 150 15 100 10 50 5 Spot Henry Hub (right scale) 0 2000 2002 2004 2006 2008 0 Categories of Core Exports 12-month percent change 2000 300 2004 2006 2008 14 12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 Source: Bureau of Labor Statistics; Wall Street Journal; Commodity Research Bureau. 12-month percent change 25 20 15 Material-intensive goods 10 5 Finished goods 0 -5 -10 -15 -20 2000 2002 2004 2006 2008 -25 -14- Prices of U.S. Imports and Exports (Percentage change from previous period) Annual rate 2009 Q2 Q3 Q4e Merchandise imports Oil Non-oil Core goods1 Monthly rate 2009 Sept. Oct. Nov. ----------------------- BLS prices --------------------14.9 12.0 9.6 .2 .8 1.7 246.9 88.3 32.3 -.6 2.0 6.2 -3.3 1.1 5.1 .3 .6 .7 -1.2 2.4 5.5 .7 .5 .4 Finished goods Cap. goods ex. comp. & semi. Automotive products Consumer goods -.5 -1.4 .0 -.1 .4 .4 2.0 -.4 1.1 .9 2.0 .6 .1 .0 .2 .0 .2 .2 .3 .2 .0 .1 .1 -.1 Material-intensive goods Foods, feeds, beverages Industrial supplies ex. fuels -2.9 .8 -4.2 7.1 1.0 8.7 16.1 5.3 19.4 2.2 .5 2.7 1.3 .3 1.6 1.2 .5 1.4 -4.2 7.1 -74.8 .3 -5.4 -39.3 -.8 4.8 116.5 .0 .4 -14.1 -.4 .4 17.1 .4 .5 30.0 2.4 3.4 2.7 -.2 .2 .8 2.6 4.1 2.9 -.3 .1 1.0 Finished goods Cap. goods ex. comp. & semi. Automotive products Consumer goods .4 2.5 -.6 -3.9 2.1 2.0 -.5 4.3 .7 .7 .6 .9 .0 .0 .1 .1 .1 .2 .1 .0 -.0 -.1 .0 .2 Material-intensive goods Agricultural products Industrial supplies ex. ag. 5.3 19.6 1.3 6.5 -7.8 12.1 5.4 -3.2 8.7 -.7 -2.9 .1 .2 -.7 .5 2.2 3.7 1.7 -3.4 12.3 -1.7 -.8 9.3 2.7 .7 .1 .2 .1 3.3 .7 Computers Semiconductors Natural gas Merchandise exports Core goods2 Computers Semiconductors --------------------- NIPA prices --------------------Chain price index Imports of goods & services Non-oil merchandise Core goods1 4.2 -3.9 -2.3 11.3 .5 1.2 ---- ... ... ... ... ... ... ... ... ... Exports of goods & services Total merchandise Core goods2 .1 1.9 2.4 4.7 4.8 5.2 ---- ... ... ... ... ... ... ... ... ... 1. Excludes computers, semiconductors, and natural gas. 2. Excludes computers and semiconductors. e Estimate based on average of two months. n.a. Not available. ... Not applicable. BLS Bureau of Labor Statistics. NIPA National income and product accounts. Source: U.S. Dept. of Commerce, Bureau of Economic Analysis; Bureau of Labor Statistics.
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