November 02, 2004 (The Editor’s Desk is updated each business day.)

Prices of imported capital goods decline again in 2003

The capital-goods import price index was the only major import-price category to decline in 2003, falling 1.1 percent. Overall U.S. import prices increased for the second consecutive year.

[Chart data—TXT]

The capital goods index has declined every year since 1995 and has trended with the steady decline in prices for computers, peripherals, and semiconductors.

Since the end of the technology boom of the 1990s, computer and semiconductor sales have slumped along with sales of telecommunications equipment. At the same time, with rapid innovation keeping manufacturing costs low and the industry undergoing consolidation, prices have continued to decline steadily.

These data are from the International Price program. To learn more about import and export prices, see U.S. import and export prices in 2003, by Melissa E. Schwartz, in the Monthly Labor Review, September, 2004. Capital goods represent approximately 28 percent of U.S. imports and include many products, such as electrical generating equipment; computers, peripherals, and semiconductors; and transportation equipment, excluding motor vehicles.