How are the Import/Export Price Indexes used?
The Import/Export Price Indexes are primarily used to deflate foreign trade statistics produced by the U.S. Government. The Import/Export Price Indexes are also a valuable input into the processes of measuring inflation, formulating fiscal and monetary policy, forecasting future prices, conducting elasticity studies, measuring U.S. industrial competitiveness, analyzing exchange rates, negotiating trade contracts, and analyzing import prices by locality of origin. • Deflating trade statistics: Major government trade statistics deflated using the Import/Export Price Indexes—the monthly U.S. trade statistics, the quarterly Balance of Payments Account (BPA) numbers, and the foreign sector of the quarterly National Income and Product Accounts (NIPA). The Import/Export Price Indexes can also be used to deflate any import or export values into real terms. • Measuring inflation: Movement in import prices can often be an indicator of future inflation since some inputs to domestic production, as
