North American TransBorder Freight Data: Indexed Data
Documentation: Indexed Freight Flow Data: U.S.-Canada and U.S.-Mexico, Trade by Mode
Using a Price Index to Deflate Freight Data
The North American TransBorder Freight Data presents total trade value in terms of nominal dollars. According to the database, total U.S.-NAFTA trade value increased by 56.0 percent between 2004 and 2012. The total nominal trade value by all transportation modes between the United States and Canada and the United States and Mexico in 2012 was $616 billion and $494 billion, respectively, reaching a combined $1.10 trillion for the year.
However, to accurately measure the economy's performance, a price index can be used to deflate the total trade value, presenting it in terms of real dollars. For example, the Consumer Price Index (CPI), published by the Bureau of Labor Statistics (BLS), is a commonly known deflator and is used to calculate cost of living adjustments for Social Security and pension payments.
U.S. Import and Export Price Indexes
The Bureau of Labor Statistics' Import/Export Price (MXP) Indexes are ideally suited for deflating the North American TransBorder Freight Data because they are available specifically for goods that account for much of the freight traffic crossing NAFTA borders. The customized MXP indexes that are used to deflate the data, such as the U.S. import price indexes by locality of origin, include the following series: EIUCOCANTOT (for Canada) and EIUCOMEXTOT (for Mexico) and the U.S. export price index (EIUIQ).
Import statistics measure the value of products of foreign origin, products of domestic origin returning to the United States without modification, and goods assembled overseas with components originating in the United States. A product is considered to be an import when it enters a U.S. customs territory, a U.S. customs bonded warehouse, or a U.S. Foreign Trade Zone.
Export statistics measure the value of products that are physically sent out of the United States. These include products exported from U.S. customs territory, products in U.S. customs bonded warehouses, and goods exported from U.S. Foreign Trade Zones.
The Import/Export Price Indexes are primarily used to deflate foreign trade statistics produced by the U.S. Government. These indexes are also useful for measuring U.S. economic competitiveness, analyzing exchange rates, and analyzing import prices by locality of origin.
BLS produces import indexes broken down by locality of origin. These indexes can be used to examine how the U.S. economy is affected by economic variables in other regions globally. BLS uses a multistage sample design to determine the specific products to be included in their import and export price indexes. Unique items and military goods, such as expensive works of art, are excluded from the price indexes.
BTS rebased the U.S. Import Price Indexes, by Locality of Origin and U.S. Export Price Indexes, by End Use to start at 100 for January 2004, thus the unadjusted and adjusted trade data series are equal to each other on this date.
Example of Indexing
In May 2012 (All Modes, Dollars in Billions):
|Country/Trade||Nominal Data||Index Values||Indexed Data|
U.S.- Canada Real v. Nominal Import and Export Value
The section of the interface that generates Figure 1 shows the U.S.-Canada unadjusted, nominal trade value versus the deflated, real import and export trade value. This covers all modes of transportation. The real import trade value was calculated by using the U.S. Import Price Indexes, by Locality of Origin as a deflator. The real export trade value was calculated by using U.S. Export Price Indexes, by End Use as a deflator.
The nominal U.S.-Canada real import and export trade value by all modes has significantly greater growth than the real value. For instance, in May 2012, the U.S.-Canada nominal import trade value was $27.8 billion compared to $19.7 billion in real dollars, while the U.S.-Canada nominal export trade value was $25.6 billion compared to $19.4 billion in real dollars.
U.S.- Mexico Real v. Nominal Import and Export Value
The section of the interface that generates Figure 2 shows the U.S.-Mexico unadjusted, nominal trade value versus the deflated, real import and export trade value. This covers all modes of transportation. Repeating the procedure used to calculate the U.S.-Canada values, the real import trade value was calculated by using the U.S. Import Price Indexes, by Locality of Origin as a deflator. The real export trade value was calculated by using U.S. Export Price Indexes, by End Use as a deflator.
The nominal U.S.-Mexico real import and export trade value by all modes has significantly greater growth than the real value. For instance, in May 2012, the U.S.-Mexico nominal import trade value was $24.9 billion compared to $17.0 billion in real dollars while the U.S.-Mexico nominal export trade value was $18.5 billion compared to $14.0 billion in real dollars.