Technical Note

                            
                            TECHNICAL NOTE

Import and Export Merchandise and Services Price Indexes -- All
indexes use a modified Laspeyres formula and are not seasonally
adjusted.  Price indexes for merchandise goods are reweighted
annually, with a two-year lag in the weights.  The merchandise price
indexes are published using three classifications: the Harmonized
System (HS), the Bureau of Economic Analysis End Use System, and the
Standard International Trade Classification (SITC) system, Rev. 3.
Price indexes for internationally traded services are presented using
two definitions: Balance of Payments (which represent transactions
between U.S. and foreign residents) and International (which represent
transactions inbound to and outbound from the U.S.).  Published series
use a base year of 2000=100 where possible.  More detailed index
series and additional information may be obtained at
http://www.bls.gov/mxp, or by calling (202) 691-7101.

Import Price Indexes -- Products have been classified by the
Harmonized Tariff Schedule of the United States Annotated (TSUSA).
Import prices are based on U.S. dollar prices paid by the U.S.
importer.  The prices are generally either "free on board" (f.o.b.)
foreign port or "cost, insurance, and freight" (c.i.f.) U.S. port
transaction prices, depending on the practices of the individual
industry.  The index for crude petroleum is calculated from data
collected by the U.S. Department of Energy.

Export Price Indexes -- Products have been classified by the
Harmonized Schedule B classification system of the U.S. Bureau of the
Census.  The prices used are generally either "free alongside ship"
(f.a.s.) factory or "free on board" (f.o.b.) transaction prices,
depending on the practices of the individual industry.  Prices used in
the grain index, excluding rice, are obtained from the U.S. Department
of Agriculture.

Import Indexes by Locality of Origin -- Prices used in these indexes
are a subset of the data collected for the Import Price Indexes.
Beginning with January 2002, the indexes are defined by locality of
origin using a nomenclature based upon the North American Industry
Classification System (NAICS).  Nonmanufactured goods are defined as
NAICS 11 and 21, and manufactured goods are defined as NAICS 31-33.

Services Price Indexes -- The Air Passenger Fares Indexes are
calculated from data collected from a commercial airline reservation
system.  These data exclude frequent flyer tickets and those sold by
consolidators. The Crude Oil Tanker Freight Indexes are calculated
from data collected by the U. S. Department of Energy, and the
publication of these indexes is lagged two months.  The Air Freight and
Ocean Liner Freight Indexes are calculated from data collected
directly from companies.  The trade dollar figures for services indexes
will not sum up to the aggregate dollar value because not all
categories are shown in the tables.  Fact sheets specifying detailed
information for each services industry are available at
http://www.bls.gov/mxp under "Publications and Other Documentation".

Revision Policy -- To reflect the availability of late reports and
corrections by respondents, monthly data may be revised in each of the
three months after original publication and quarterly data may be
revised one quarter after original publication.

Uses of the Data -- The primary use of the indexes is to deflate trade
statistics.  For merchandise trade, the End Use classification system
is the structure used by the U.S. Department of Commerce in the
construction of the foreign trade sector of the National Income and
Product Accounts.  Indexes published using the Harmonized System and
the Standard International Trade Classification, Rev. 3, both
international structures, are useful for general market analysis.  For
trade in international services, Balance of Payments indexes are used
for deflating National Accounts data, while International indexes are
more appropriate for market analysis.  Merchandise and services
indexes also can be used to study U.S. competitiveness and price
elasticities, and the merchandise import indexes by country or region
of origin are useful for terms of trade analysis.


The import and export news release contains monthly price indexes at
the two-digit level of detail.  If you would like to be added to the
mailing list for more detailed tables, please fill out the form below
and mail or fax it to the following address:
                                   
                         Division of International Prices
                         Bureau of Labor Statistics
                         PSB Building, Rm. 3955
                         2 Massachusetts Avenue, N.E.
                         Washington, DC 20212

Phone Number: (202) 691-7101                 Fax Number: (202) 691-7195

IPP data are also available on the IPP home page (http://www.bls.gov/mxp).  
To access data using Anonymous FTP, use the Internet address 
(ftp://ftp.bls.gov).  For technical assistance in using the BLS Internet 
site, send e-mail to (labstat.helpdesk@bls.gov).  For IPP data requests, 
send e-mail to (mxpinfo@bls.gov).

The IPP news release is now available through an e-mail subscription
service.  Please see the subscription link on (http://www.bls.gov/mxp)
or (http://www.bls.gov/bls/newsrels.htm).
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