IPP introduces additional Locality of Origin import price indexes

The International Price Program (IPP) of the Bureau of Labor Statistics, as the primary source of data on price changes in the foreign sector, publishes monthly indexes of import and export prices for U.S. merchandise.1 While such indexes convey price information across product categories of goods traded between the United States and the rest of the world, there is evidence that price trends further vary by the geographic source of the product being traded.2 U.S. Locality of Origin (LOO) import price indexes were first published by IPP in 1992 for the following groupings, geographic regions, and countries: industrialized and other countries, Canada, European Union, Japan, and the Asian Newly Industrialized Countries (NICs); in 1997 the Latin America locality was added to publication.3 Since 1992, other countries and regions such as China and Mexico have emerged as important trading partners with the United States. Thus, in January 2005, price index series for these two countries were added to the set of published LOO price indexes along with six other localities: France, Germany, the United Kingdom, the Pacific Rim, the Association of South East Asian Nations (ASEAN), and the Asia Near East.4 (See box.) The new localities were determined according to customer interest, having a sufficient number and variety of usable item prices to reflect the actual dollar value and type of trade, and