1220-0025 Supporting Statement Part A Final

U. S. Import and Export Price Indexes

OMB Control Number 1220-0025

OMB Expiration Date: April 30, 2025

Supporting Statement for

U.S. Import and Export Price Indexes

OMB CONTROL NO. 1220-0025

This Information Collection Request seeks a 3-year revision of the U.S Import and Export Price Indexes (MXPI) information collection. There are substantive changes to the methodology of this collection as the International Price Program plans to implement an alternative data source in FY 2025 which necessitates changes to the Program’s sampling process and index calculation. For select homogenous product areas, directly collected price data will be replaced with unit value indexes calculated from administrative trade data available from the Department of Commerce.

A. JUSTIFICATION

1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.

The U.S. Import and Export Price Indexes (MXPI), together with the Consumer Price Index (CPI) and the Producer Price Index (PPI), constitute the major outputs of the price programs of the Bureau of Labor Statistics (BLS). Although the International Price Program (IPP), which produces the U.S Import and Export Price Indexes, is the Bureau of Labor Statistics' newest price program, it can trace its origins to the late 19th Century. In 1886, the Aldrich Committee of the U.S. Senate recommended the establishment of a Bureau of Labor to provide statistics on the condition of U.S. workers and the prices of imported goods in the U.S. and other countries. The committee sent staff members to other countries, principally in Western Europe, to collect prices and in 1889, published a report comparing prices in the U.S. with those of Western Europe. This report, which focused on prices for goods imported into the U.S., was the precursor of the Wholesale Price Index. Following World War II, the BLS again began a program to develop import and export price indexes. The Program advanced to the point where hundreds of prices had been collected from importers and exporters and test indexes had been calculated. Because of a Bureau‑wide 50 percent budget reduction, however, the Program was terminated in 1948.

In 1961, a report on federal price statistics prepared by the National Bureau of Economic Research (NBER) for Congress' Joint Economic Committee suggested that responsibility for compilation of import and export price indexes be assigned to a federal statistical agency "to obtain the attention and resources for these indexes that we believe are essential." A further study undertaken for the NBER by Irving Kravis and Robert Lipsey gave greater impetus to the project. In their study, eventually published as Price Competitiveness in World Trade (https://www.nber.org/books-and-chapters/price-competitiveness-world-trade), Kravis and Lipsey outlined both the need for such measures and the feasibility of producing them. In the meantime, the BLS, largely because of its expertise in the development of other price measures, had also begun research on the feasibility of producing import and export price indexes. In 1970, Congress provided funds for the construction of import and export price indexes. The legal authority for the collection of import and export data is contained in Title 29, Section 2 of the United States Code (Attachment 1).

The first export price indexes, published in 1971, showed annual price changes for selected categories of goods, primarily machinery and transportation equipment for the period 1964‑71. The first annual import price indexes were produced in 1973. Largely as a response to changing international economic conditions and the need on the part of both the government and the private sector to obtain these data on a more timely basis, collection and publication of the international price indexes were begun on a quarterly basis in 1974. A general index for all-import goods was published for the first time in the fourth quarter of 1982 and an index for all-exports was first available at the end of 1983.

The expansion of international trade and improvements in the design of the IPP survey led the Office of Management and Budget (OMB) in 1982 to place the MXPI on its list of Principal Federal Economic Indicators (PFEI), alongside the CPI and the PPI. Economic indicators placed on this list must be released on schedule and are recommended for use in public and private sector economic analysis.

The increasing importance and value of the MXPI led to requests for monthly indexes in 1988 from OMB and several other policy-making government agencies. To fill this need, the IPP initiated an effort in late 1988 to provide these agencies with monthly indexes for all-imports, all-exports, and certain highly-aggregated import and export product groupings. Using a subset of data from the regular quarterly sample, the Program began publishing these indexes in February 1989. Because of continuing interest from OMB and other government agencies and because of the need to deflate monthly Gross Domestic Product (GDP) figures using MXPI , the IPP now collects all of its data for goods on a monthly basis.

In 1992, the IPP began publishing import price indexes delineated by locality of origin (LOO), including two country breakouts (Canada and Japan), three regional breakouts (European Union, Latin America, and Asian Newly Industrialized Countries), and breakouts for Developed and Developing Countries (later changed to Industrialized Countries and Other, the latter of which has since been discontinued.) Ongoing customer interest has prompted the IPP to significantly expand this set of data over the years, adding LOO price indexes for France, Germany, the United Kingdom, Mexico, the Pacific Rim, China, the Association of Southeast Asian Nations, and Asia Near East countries in 2005, and breakouts for select industry areas in subsequent years. In 2019, the Program began publishing a LOO price index for Taiwan. To date, the IPP publishes 222 LOO price indexes across the various localities, including 26 price indexes for imports from China and 26 price indexes for imports from the European Union.

In addition to the expansion of the LOO price indexes, the Program has developed new measures to further address interest in the competitiveness of the U.S. in the global marketplace. In 2018, the IPP added two more competitive measures to its published data set: locality of destination (LOD) indexes and terms of trade (TOT) indexes. The locality of destination indexes are the counterpart to the existing locality of origin import price indexes, measuring U.S. export prices of goods based on the country, region, or grouping to which items are exported. IPP currently publishes LOD price indexes for the following countries, regions, and groupings: Industrialized Countries, Canada, European Union, Germany, Latin America, Mexico, the Pacific Rim, China, and Japan; price indexes for manufacturing and nonmanufacturing industries are published for these localities where sufficient data are available. Terms of trade indexes are calculated by dividing the LOD index for a given locality by the corresponding LOO index, measuring the change in the purchasing power of exports relative to imports (for a given locality). These indexes broadly describe the relative trade competitiveness over time between the United States and its trading partners. Currently, the Program publishes TOT indexes for all top-level groupings for which LOD indexes are published. Previously, the only measures of U.S. terms of trade were the all-world terms of trade indexes produced by the U.S. Bureau of Economic Analysis (BEA) and published in BEA table 1.8.6 Command-Basis Real Gross Domestic Product and Gross National Product, Chained Dollars. More information about the Program’s TOT indexes is available on IPP’s Terms of Trade Indexes page (https://www.bls.gov/mxp/publications/factsheets/terms-of-trade.htm). Also in 2018, the IPP collaborated with the PPI to begin publishing a NAICS-based PPI Industry Net Output Data and IPP Import Data table (https://www.bls.gov/mxp/publications/additional-publications/import-export-price-indexes-producer-price-indexes-comparability-table-2022.htm) and also published a report (Monthly Labor Review article “Comparing NAICS-based Producer Price Index industry net output data and International Price Program import data,” available at https://www.bls.gov/opub/mlr/2018/article/comparing-naics-based-producer-price-index-industry-net-output-data-and-international-price-program-import-data.htm) for determining comparability between NAICS indexes published by both programs. This table can assist with comparing price trends in domestically produced and imported products.

In 2019, the Program once again collaborated with the PPI to produce an experimental set of satellite inputs to industry indexes (https://www.bls.gov/ppi/input-indexes/bls-satellite-input-to-industry-indexes.xlsx), available for most 3-digit NAICS industry groups. To calculate an index at the 3-digit NAICS level, PPI commodity indexes are used to construct the domestic portion of the index and IPP import price indexes are used to construct the imported portion of the index; the PPI and MXPI are then aggregated to an overall price index that measures price change for inputs to the industry sector, regardless of their country of origin. Data for these (unofficial) indexes are available beginning in December 2018 and are published monthly.

In 2020, the Program expanded its list of published NAICS indexes to include data for select 6-digit groupings, for both import and export price indexes, and began publishing price indexes for Advanced Technology Products. On the import side, IPP publishes price indexes for biotechnology products, life science products, information & communications products, and aerospace products; export price indexes are published for biotechnology products, opto-electronics, information & communications products, electronics, and aerospace products. The Program also began publishing a new table which includes the date since when there was an equal or larger (1-month and 12-month) percent change for select End-Use import and export price indexes (Percent Changes and Historical References for Select Import and Export Price Indexes, available at https://www.bls.gov/web/ximpim/largest.htm) and expanded the annual publication of variance estimates to cover the majority of published goods indexes. Variance data for 2020 onward are published by classification system to the 5-digit level of detail for the Bureau of Economic Analysis (BEA) End-Use Classification System, the 6-digit level of detail for the North American Industrial Classification System (NAICS), and to the 4-digit level of detail for the Harmonized Classification System. (Variance data were previously only available for two series, all-imports and all-exports.) These estimates help users assess the precision of the Import and Export Price Indexes and are available at https://www.bls.gov/mxp/data/variance-statistics.htm.

Beginning in 2025, and the reason for the clearance request for this information collection, the Program has reached a milestone achievement with the planned implementation of an alternative data source for some of the Import and Export Price Indexes (MXPI). The IPP will blend unit value indexes (calculated from trade transaction records from the Department of Commerce) with directly collected survey data to calculate and publish the MXPI. Historically, unit value indexes have been used on a very limited basis, and were not considered a good substitute for directly collected data in the calculation of price indexes due primarily to the potential for unit value bias, an upward drift of price indexes that reflects price changes resulting from product or quality mix instead of product prices; in fact, the existence of the IPP was borne of quality issues associated with unit value indexes 50 years ago. However, the improvements in the quality of the trade transaction records, including coverage, level of detail, and timeliness are extensive, since the period of earlier criticism of unit values and the inception of the IPP. Furthermore, new statistical methods for addressing unit value bias have recently been developed to match product varieties in the trade records over time. In addition, the unit values will be calculated only for product areas that are more homogeneous, i.e., of a similar nature, in line with standard statistical practice. These improvements, along with a recent downward trend in IPP’s traditional data collection via survey, prompted the Program to evaluate the use of Census trade transaction records and the calculation of statistically robust unit value indexes in the MXPI. In 2018, the IPP launched a major research initiative exploring the use of unit value indexes based on administrative trade data in place of directly collected data for more homogenous product areas.

With the application of new methods for mitigating unit value bias, the IPP has constructed research import and export price indexes based on administrative trade data for January 2012 through December 2021. Comparison of the research data sets to existing BLS price indexes (including published and unpublished import and export price indexes), indicates that unit value indexes based on administrative trade data can be used in place of directly collected data for many of IPP’s homogenous product price indexes. This new data source also allows for the expansion of published lower-level indexes and improves index quality; while the existing MXPI are based entirely on a modified Laspeyres formula (as current trade weights are not available), the availability of current period weights in the administrative trade data allows the IPP to apply a Tornqvist formula to lower-level aggregates. (The Tornqvist formula is considered superior to the Laspeyres formula for handling substitution bias, a well-known problem for fixed-basket price indexes which do not account for consumer expenditure switching from relatively more expensive products to cheaper ones as prices change.)

In addition to the expansion of published indexes and improvement in index quality, the replacement of directly collected data with unit value indexes will result in a considerable drop in respondent burden as fewer companies will be needed to support publication of the MXPI. Although burden will be reduced in both initiation and repricing, the most significant decrease will be in the initiation process; the IPP expects to cut sample sizes by as much as 33% for imports and 33% for exports.

Additional details and research data sets are accessible from the MXP Research page (https://www.bls.gov/mxp/data/research.htm). Methodological details are available in Supporting Statement Part B and in the Technical Federal Register Notice (https://www.federalregister.gov/documents/2023/09/11/2023-19486/comment-request).

In the realm of services, the IPP continues to publish indexes on import and export air passenger fares and air freight rates as well as indexes for inbound and outbound air freight rates. In 2007, the Program began publishing two new indexes covering Export Travel and Tourism and Export Education in 2007. However, these series, along with the Inbound Crude Oil Tanker Freight, Inbound Ocean Liner Freight, and Inbound/Outbound Air Passenger Fares indexes were no longer supported due to budget constraints and were discontinued effective January 2008.

In producing monthly price indexes on goods and services traded between the U.S. and the rest of the world, the International Price Program remains the primary source of data on price changes in the foreign sector.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.

The most critical uses of the Import and Export Price Indexes (MXPI) are found in the public sector. Major public-sector uses of the MXPI include deflating monthly import and export trade statistics, deflating the foreign trade component of the GDP, formulating monetary and fiscal policy, determining trade and commercial policy, negotiating trade agreements, and escalating government contracts. The prices provided by respondents form the foundation of information necessary to ensure that the MXPI accurately reflect conditions in the international marketplace. U.S. policy makers must have reliable and accurate statistics to insure that appropriate actions are taken, especially during periods of economic difficulty. When public policy makers have reliable statistics on international trade, they are in a better position to make sound decisions on the regulation and promotion of international trade. These decisions can benefit all internationally active companies.

The IPP produces monthly indexes in order to provide information with which to deflate the monthly merchandise trade data issued by the Department of Commerce. (Attachments 2 and 3 are examples of trade balances issued monthly in “United States Department of Commerce: U.S. International Trade in Goods and Services," available online at https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services.) The resulting real trade flows, obtained by using monthly international price indexes as deflators, enable measurement of real output and provide a more comprehensive understanding of the underlying dynamics of international trade.

The Commerce Department also uses international price indexes to adjust for inflation in the foreign trade sector of its quarterly National Income and Product Account (NIPA). (Attachments 4 and 5 show the constant dollar tabulation of imports and exports from the U.S. Department of Commerce, Survey of Current Business, available online at https://apps.bea.gov/scb/).

In addition to serving as a tool for the public sector, the Import and Export Price Indexes have a variety of other private sector uses by the media, bankers, financial analysts, academic researchers, and corporate managers. These uses include market analysis, forecasting future price trends, estimating for contract escalation and replacement cost accounting, measuring import price and income elasticity, and estimating exchange rate pass-through values and the effect of currency fluctuations on prices by specific countries or regions.

The Import and Export Price Indexes can also be used in various ways to measure a country’s international competitiveness. One method for indicating international competitiveness is through the use of terms of trade indexes. A terms of trade index is defined as an export price index divided by the respective import price index. Because demand for imports and exports is tied to import and export prices, a change in the terms of trade will lead to a change in the trade balance. A second method to measure a country’s international competitiveness is to create export price comparison indexes that compare one country’s export prices against another country’s export prices. A third way is by expressing import and export price indexes in foreign currency terms. Foreign currency import price indexes measure fluctuations in the revenue for foreign sellers in the U.S., and foreign currency export price indexes illustrate how U.S. export prices vary from the perspective of buyers of U.S. goods.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also, describe any consideration of using information technology to reduce burden.

Prior to the onset of the coronavirus pandemic, initiation of respondents into the IPP survey was primarily conducted in person by BLS data collectors. However, during the coronavirus pandemic, data collectors temporarily ceased all personal interviews and began conducting initiation interviews by telephone and video. IPP has since continued and expanded the use of video collection in order to reduce respondent burden and data collection costs associated with travel.  

For repricing, the primary interaction between the Bureau and the respondents has modernized over time. The paper repricing form with return instructions via fax or postal mail was superseded by secure web-based repricing, which was introduced in 2003. Effective January 2018, the IPP discontinued mail out/fax back repricing in order to contain program costs, resulting in nearly all respondents providing prices through the direct update of data online via a secure BLS website. In September 2022, the BLS introduced new functionality (referred to internally as “Web Lite”) which allows verified respondents to securely upload files of price information with a secure link, and without using a login; the uploaded files are reviewed by analysts who manually enter the price data into IPP’s repricing application. As of August 2023, 94 percent of IPP respondents were providing prices via the secure website and 98 percent were reporting electronically (web or email repricing). (Attachments 6A-6E contain instructions and temporary account/password e-mails for providing prices via the web. Attachments 6E and 6G are the ‘time to reprice’ e-mail for newly-initiated and existing web respondents, respectively. Attachments 6F and 6H are the reminder e-mails for newly-initiated web respondents who have not yet provided data and for existing web respondents who have not yet provided data, respectively. Attachments 6I and 6J show screen shots of the web application. Attachment 7 contains all “Web Lite” screens, including the login & welcome pages as well as the file upload screens.)

The respondents who provide pricing information using non-web options provide data via non-automated phone or e-mail. The e-mail option was broadened in 2008 with the introduction of an e-mail repricing application which generates the repricing form in an Excel spreadsheet as an attachment in a corresponding e-mail prompting the respondent to provide prices. (Attachment 8A is the ‘notification to reprice’ e-mail sent to respondents using this repricing method and Attachment 8B is a sample Excel spreadsheet containing repricing data.) Respondents using this repricing method include their price information in the Excel document and return it via e-mail. This collection method is not offered to respondents by Field Economists during initiation but is used by Industry Analysts at the National Office as a last resort for securing respondent cooperation. (Attachment 9 is the phaseout letter e-mailed to all web/non-web respondents who have provided IPP with an e-mail address.)

Respondent Burden

IPP achieved a notable reduction in respondent burden with the introduction of web repricing in 2003, an overall less time-consuming and more efficient and secure repricing method than the mail out/fax back method. The shift to web-based repricing as the primary repricing method resulted in less follow-up by the Program as the web-based application allows for verification/revisions of data previously provided to IPP, immediately prompts for explanations for large price changes, and provides the option to replace discontinued items with new ones. In order to further reduce burden, the Program has implemented several system changes to the web-based application over the years, including the development of an easier login, notifications of system downtimes, self-registration for respondents who have agreed to provide data to both the IPP and the PPI, and the option to provide an additional e-mail address to be copied on all e-mails sent by IPP.

In November 2019, IPP adopted the use of a new web survey format/layout suitable for both desktop and mobile devices. The new design is more user-friendly as it utilizes modal windows in combination with separate pages instead of just separate pages for each part of the repricing process. For example, when respondents update price factors, a modal window pops up in front of the parent screen. This makes navigation more user-friendly since previously, respondents would be taken to a different page to update the price factors and then returned to the parent page.

In addition, IPP has implemented “Contact Restriction” functionality which allows the Program to suspend reminder emails to respondents upon request. This feature accommodates respondents during times of difficulty (natural disaster, etc.) and was especially useful managing burden during the pandemic when respondents may be overwhelmed or not trading certain products. The Program also proactively monitors certain situations (hurricanes, wildfires etc.) by state to determine if contact restriction may be proactively called for.

In September 2022, the Program implemented new functionality to accommodate those respondents who do not wish to login to the web survey. The new functionality (referred to internally as “Web Lite”) provides a secure method for respondents to upload files using a secure link, without using a login and password.

In 2025, the Program will achieve a milestone in burden reduction with the replacement of (some) directly collected survey data with unit value indexes based on trade transaction records. After more than five years of research and with the application of new methods to mitigate unit value bias, the Program has determined that for select homogenous product areas, unit value indexes calculated from import and export transaction records (obtained from the Census Bureau) can be used in place of price information collected directly from companies.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item A.2 above.

The U.S. government collects data on the value of all U.S. imported and exported goods. Until 1989, the Department of Commerce used these data to construct unit value indexes. These indexes were calculated at a highly aggregated level and shown to have statistical bias that mismeasured price change and thus were discontinued in October 1989. From that time, the import and export price indexes estimated from survey data have been the sole comprehensive price indexes for imports and exports of merchandise goods.

In order to reduce costs and duplication, and to mitigate the decline in respondent participation, the IPP began investigating the use of the modernized dataset on U.S. imported and exported goods available electronically from the Department of Commerce. Advanced computing capacity and statistical methods can now be used to limit statistical bias in unit value indexes for select goods that are more homogenous in nature. These high-quality unit value indexes will be incorporated into the Import and Export Price Indexes, replacing survey data in some product areas. This change in data source will reduce respondent burden.

In addition, the IPP uses Department of Agriculture, Department of Energy, and certain other published market data in selected areas of goods and services for which average, spot, or unit prices represent commodity trade. The unit value indexes will replace some of these data sources as well.

5. If the collection of information impacts small businesses or other small entities, describe any methods used to minimize burden.

The sampling procedures used by the IPP tend to select firms that are high‑volume, regular traders in a product or service area. This technique minimizes the chances of small organizations being selected to report data for more than one or two items.

6. Describe the consequence to federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.
   
   

The Import and Export Price Indexes are closely followed statistics which are viewed as a sensitive indicator of the economic environment. Federal policy‑makers in the Department of Treasury, the Council of Economic Advisors, the Bureau of the Census, the Bureau of Economic Analysis, and the Federal Reserve Board utilize these statistics to form and evaluate monetary and fiscal policy and the general business environment. These agencies use the monthly index information to deflate trade statistics to produce real, as opposed to the nominal, trade flows. These real figures help to improve the agencies' formulation and evaluation of monetary and fiscal policy and the general business environment. Failure to provide current data would tend to delay recognition and adaptation time to economic events.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

• requiring respondents to report information to the agency more often than quarterly;

• requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;

• requiring respondents to submit more than an original and two copies of any document;

• requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than three years;

• in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;

• requiring the use of statistical data classification that has not been reviewed and approved by OMB;

• that includes a pledge of confidentially that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

• requiring respondents to submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information's confidentiality to the extent permitted by law.

All IPP data for goods and services are collected and published on a monthly basis. This monthly collection and publication of price data enables the Department of Commerce to produce monthly merchandise trade flow figures adjusted for inflation.

In order to meet our publication deadlines, the IPP requests that its respondents provide the monthly price information within a week of the original request. Currently, the IPP Press Release is published during the second or third week of the month following the reference period.

The International Price Program does not request duplicates of any document.

The IPP does not require respondents to retain records of any kind, for a period of any duration.

The IPP is designed to produce valid and reliable results that can be generalized to the universe of study.

The MXPI are based on established classification systems.

The IPP collects confidential price data. These data are for internal BLS use only, to construct price indexes.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

One comment was received as a result of the Federal Register Notice published in 89 FR 3695 on January 19, 2024.

The Census Bureau (Census) commented that it “strongly supports the proposed change in methodology” and that it has made significant investments to research and production activities necessary to support delivery of the trade transaction data to BLS in support of this modernization effort. Census added that the use of the administrative trade data as an alternative data source for (directly-collected) survey data will improve the MXPI and explained that these indexes are a crucial (input) component for the Gross Domestic Product (GDP).

A Federal Register Notice announcing the planned use of administrative trade data (as an alternative data source) beginning in 2025 was published in 88 FR 62402 on September 11, 2023. A summary of the comments received on that notice is described below.

IPP’s primary customers, the Bureau of Economic Analysis (BEA) and the Census Bureau (Census), each provided a strong letter of support for the use of administrative trade data in the Import and Export Price Indexes (MXPI), recognizing that improvements in the indexes have the potential to lead to improvements in their agencies’ statistics (as the MXPI are a critical data source for these agencies). Both also requested that the Program consider ways for the new methodology to minimize the impact of quality changes. Additionally, BEA recommended that IPP consider naming the indexes based on the new methodology to indicate that they are based on average prices (to differentiate from the currently published indexes which are based on prices for unique goods), and Census stressed the importance of maintaining companies’ confidentiality. IPP will take BEA’s suggestion into consideration and remains committed to protecting the confidentiality of information provided to the Program.

In addition to BEA and Census, other parties also expressed concerns about the new methodology adequately accounting for quality changes. IPP recognizes that historically, unit value indexes have not been considered a good substitute for directly collected data in the calculation of price indexes due primarily to unit value bias, the reflection of price changes resulting from product or quality mix instead of from product prices. However, the coverage and level of detail of the trade transaction records have expanded since the inception of the IPP and new statistical methods for addressing unit value bias have recently been developed. Senior BLS economists and statisticians have conducted extensive analysis of the new methodology and received validation from numerous experts for its use in a subset of MXPI that are homogenous and not subject to quality change and that validate the accuracy of IPP’s potentially publishable indexes; they concluded that the new methodology will improve index quality for some of the more homogenous product areas. Homogenous items do not experience quality change in the way that advanced technology or manufactured items do; however, IPP will continue to adjust for quality changes in the product areas which are more heterogenous and for which price information will continue to be directly collected. The Program is also hopeful that future research will reveal additional improvements to the new methodology.

Several comments received were in support of the use of administrative trade data in the Import and Export Price Indexes, acknowledging that this new data source will improve index quality and quantity. It was further noted that the implementation of this initiative will benefit researchers and public policy makers and possibly even spur other federal agencies to make greater use of existing administrative records in lieu of fielding surveys for the collection of existing data.

Other comments received questioned whether the role of the Field Economist would change, whether the survey would remain voluntary, and whether IPP will verify the administrative trade data for accuracy. The role of the Field Economist will not change and while data collection by Field Economists will shift towards more heterogenous product areas, the individual FE workloads are not expected to change. Also, participation in the survey will remain voluntary and the Program will continue to employ procedures and validations for quality assurance.

The Program also received a request to publish more country/region breakouts for the locality indexes, more detailed locality indexes, and a monthly measure of dispersion for the indexes based on unit value indexes calculated from administrative trade data. IPP expects to publish more locality indexes, including indexes at a more detailed level, although the timing is unknown. The Program also recognizes the value of data quality measures for these indexes and publishing these measures is a long-term goal.

Lastly, some comments indicated confusion by the use of the word “estimates.” The Import and Export Price Indexes are based on actual data but can be referred to as “estimates” as IPP uses mathematical calculations to combine real data to present the changes in the prices of a basket of goods over time.

The IPP survey reflects inputs that have been provided by a wide range of organizations and individuals over the years. The original recommendations for the IPP survey grew out of the 1961 report sponsored by the Joint Economic Committee of the Congress. This information has been updated and maintained via regular contact with federal statistical users’ conferences, numerous international conferences, and ongoing meetings with the various federal agencies which use the IPP data for analysis. Users include offices of the Departments of Labor, Commerce, Treasury, and Energy, as well as the Congressional Budget Office and the Federal Reserve Board.

Since the Program involves a continuing rotation of industries and sampling units, contacts are conducted in person with trade groups and a number of individual businessmen. The IPP survey is voluntary and may be susceptible to nonresponse. It therefore requires that the ideas on survey design, survey operations and data presentation offered by these sources be studied carefully and instituted when possible.

9. Explain any decision to provide any payments or gifts to respondents, other than remuneration of contractors or grantees.

The IPP does not provide any payment or gift to its respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

The Confidential Information Protection and Statistical Efficiency Act (CIPSEA) safeguards the confidentiality of individually identifiable information acquired under a pledge of confidentiality for exclusively statistical purposes by controlling access to, and uses made of, such information. CIPSEA includes fines and penalties for any knowing and willful disclosure of individually identifiable information by an officer, employee, or agent of the BLS.

 

Based on this law, the BLS provides respondents with the following confidentiality pledge/informed consent statement:

 

The Bureau of Labor Statistics, its employees, agents, and partner statistical agencies, will use the information you provide for statistical purposes only and will hold the information in confidence to the full extent permitted by law. In accordance with the Confidential Information Protection and Statistical Efficiency Act (44 U.S.C. 3572) and other applicable Federal laws, your responses will not be disclosed in identifiable form without your informed consent. Per the Federal Cybersecurity Enhancement Act of 2015, Federal information systems are protected from malicious activities through cybersecurity screening of transmitted data.

 

BLS policy on the confidential nature of respondent identifiable information (RII) states that “RII acquired or maintained by the BLS for exclusively statistical purposes and under a pledge of confidentiality shall be treated in a manner that ensures the information will be used only for statistical purposes and will be accessible only to authorized individuals with a need-to-know.”

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

As part of the disaggregation process (conducted during initiation), Field Economists request company trade data (required to assign measures of size for disaggregation) which some respondents consider sensitive information. To alleviate their concerns, Field Economists explain that the purpose of the disaggregation process is to identify a single (or very few) specific goods or services for pricing and inform them of BLS’ policies concerning confidentiality. In IPP’s experience, the BLS policies and discussions with the Field Economists alleviate any serious concerns.

Additionally, price information and whether prices are representative of intracompany transfers (both requested during initiation and repricing) are also considered sensitive information by some respondents. Again, Field Economists (during initiation) and Industry Analysts (during repricing) inform them of BLS’ policies on confidentiality to alleviate any concerns. (Note also that the IPP conducted a study which found no significant difference in the trends for non-market based transfer prices and those at arm’s length. This conclusion prompted the IPP to begin including all transfer prices in index calculation beginning with the February 1998 indexes.)

12. Provide estimates of the hour burden of the collection of information. The statement should:

• Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. General, estimates should not include burden hours for customary and usual business practices.

• If this request for approval covers more than one form, provide separate hour burden estimates for each form.

• Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included in Item 14.

Average person‑hours per response is estimated separately for initiation and for repricing.

Prior to initiation, the Field mails an intro letter to the companies sampled for inclusion in the Import and Export Price Indexes survey; the letter explains the importance of participating in the survey and includes BLS’ confidentiality pledge (Attachment 10). (Note that there may be special circumstances when an intro letter is not sent, such as when a cooperative current reporter immediately agrees to participate.)

For initiation, a Field Economist conducts an interview in-person or via video or phone and enters information directly into a laptop computer; Attachment 11 contains screen shots from this application. The disaggregation worksheet (form 3008, Attachment 12), the B form (form 230, Attachment 13), the checklist (form 231, Attachment 14) based on the Harmonized Classification System manual, and the Survey Unit Information (SUI) Listing (form 228, Attachment 15) are all used by BLS data collectors during initiation. (IPP has checklists covering all Harmonized Classification System and Schedule B product areas excluding chapters¹ 86, 97, 98, and 99. For import chapters and descriptions, go to https://hts.usitc.gov/current. For export chapters and descriptions, go to https://www.census.gov/foreign-trade/schedules/b/2021/index.html). The SUI Listing provides information to the Field Economist and is not filled out by the respondent, nor is it required that the Field Economist fills it out.

The initiation response burden estimate is based on field collection experience. Response burden varies depending on the size of the company, the number and variety of goods or services traded in the establishment, and the types of records kept. Thus far in the survey, which has been carried out at small, medium, and large size establishments, the respondent burden for initiation averages approximately one hour.

Note that in FY 2025, IPP is scheduled to implement a new initiation system with improved screen design and user navigation; there will be no changes to the information requested during initiation and the Program will continue to use the existing initiation materials except for the B form (Attachment 13) which will be retired upon implementation. A nonsubstantive change request is planned for fall 2024 for OMB approval of the new improved initiation system.

For repricing, which is an update to price data previously provided by the respondent (using the online data collection application), the burden estimate is based on internal testing and BLS experience in earlier samples. (Attachments 6I and 6J show screenshots from the web repricing application; attachment 7 shows screenshots from the Web Lite application.) The burden varies from one minute for routine updates of prices for unaltered goods or services, to thirty minutes for reporting changes in product or service specifications or substitution of models within a product or service line. The IPP estimates that it takes approximately 5 minutes, on average, to reprice one item.

Companies and establishments of all employment sizes, including those with fewer than 100 employees, are covered in the samples. This comprehensive coverage is necessary to avoid bias and assure that the sample is representative of the universe of exporters/importers. Small companies, collectively, have substantial weight in the price‑forming universe, and the evidence suggests that the pricing behavior of small companies is different from that of large companies.

Therefore, the smaller units need to be directly surveyed.

The sample sizes and estimated annual respondent burden for FY 2025, FY 2026, and FY 2027 are shown on the following pages. Data on exports and imports are calculated separately for analysis purposes.

Note that although the implementation of the administrative trade data as an alternative data source will reduce the number of companies initiated, it is not expected to impact the average hour burden estimate for a company’s participation in initiation or in repricing.

EXPORTS

	Total Annual Responses						Estimated Total Hrs of Annual Burden
	Number of Respondents (end of FY)2		Frequency of Response Per Year		Total Annual Responses			Total Annual Responses		Estimated Avg # of Hrs Per Response		Estimated Total Hrs of Annual Burden
Fiscal Year 2025
Initiation3	0	x	1	=	0			0	x	1	=	0
Repricing4	850	x	9.05	=	7650			7650	x	0.43206	=	3305
Total Burden	850				7650			7650				33057
Fiscal Year 2026
Initiation	600	x	1	=	600			600	x	1	=	600
Repricing	850	x	9.0	=	7650			7650	x	0.4320	=	3305
Total Burden	1450				8250			8250				3905
Fiscal Year 2027
Initiation	600	x	1	=	600			600	x	1	=	600
Repricing	850	x	9.0	=	7650			7650	x	0.4320	=	3305
Total Burden	1450				8250			8250				3905

IMPORTS

Total Annual Responses

Estimated Total Hrs of Annual Burden

Number of Respondents (end of FY)

Frequency of Response Per Year

Total Annual Responses

Total Annual Responses

Estimated Avg # of Hrs Per Response

Estimated Total Hrs of Annual Burden

Fiscal Year 2025

Initiation

900

x

1

=

900

900

x

1

=

900

Repricing

1200

x

8.8

=

10560

10560

x

0.4777⁸

=

5045

Total Burden

2100

11460

11460

5945⁹

Fiscal Year 2026

Initiation

900

x

1

=

900

900

x

1

=

900

Repricing

1200

x

8.8

=

10560

10560

x

0.4777

=

5045

Total Burden

2100

11460

11460

5945

Fiscal Year 2027

Initiation

900

x

1

=

900

900

x

1

=

900

Repricing

1200

x

8.8

=

10560

10560

x

0.4777

=

5045

Total Burden

2100

11460

11460

5945

	Number of Respondents (3-Year Avg FY25 - FY27)
	Initiation	Repricing	Initiation + Repricing
Exports	400	850	1250
Imports	900	1200	2100
Total	1300	2050	3350

	Burden Hours (3-Year Avg FY25 – FY27)
	Initiation	Repricing	Initiation + Repricing
Exports	400	3305	3705
Imports	900	5045	5945
Total	1300	8350	9650

Respondent burden costs for monthly data collection for the periods covered by this clearance package are as follows:

Annualized Cost of Burden
	Total Hours of Burden	Average Hourly Pay*	Annualized Cost of Burden
Exports	3705	$75.04	$278,023
Imports	5945	$75.04	$446,113
Total	9650	$75.04	$724,136
* calculated from the average hourly pay rates for fiscal years 2025, 2026, and 2027.

Estimated Annualized Respondent Cost and Hour Burden

Activity	No. of Respondents	No. of Responses per Respondent	Total Responses	Average Burden (Hours)	Total Burden (Hours)	Hourly Wage Rate	Total Burden Cost
Initiation Exports Imports	400 900	1 1	400 900	1 1	400 900	$75.04 $75.04	$30,016 $67,536
Repricing Exports Imports	850 1200	9.0 8.8	7650 10560	0.4320 0.4777	3305 5045	$75.04 $75.04	$248,007 $378,577
Total	3350	5.8239	19510	.4946	9650	$75.04	$724,136

In the first quarter of 2023, the average hourly total compensation for management, professional, and related employees in private industry was $68.65 and the average hourly total compensation for sales and office employees was $31.45 (https://www.bls.gov/news.release/archives/ecec_03172023.htm). Thus, a weighted average hourly total compensation rate of $65.90 was derived¹⁰. Estimates for 2025, 2026, and 2027 were derived by calculating the weighted average annual percent change in the Employee Cost Index (ECI) of the BLS for both categories and applying it to subsequent years¹¹. These numbers would make the hourly total $71.83 for 2025, $74.99 for 2026, and $78.29 for 2027, creating an average hourly rate of $75.04 for the three years.

13. Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information. (Do not include the cost of any hour burden shown in Items 12 and 14).

• The cost estimate should be split into two components: (a) a total capital and start up cost component (annualized over its expected useful life); and (b) a total operation and maintenance and purchase of service component. The estimates should take into account costs associated with generating, maintaining, and disclosing or providing the information. Include descriptions of methods used to estimate major cost factors including system and technology acquisition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be incurred. Capital and start-up costs include, among other items, preparations for collecting information such as purchasing computers and software; monitoring, sampling, drilling and testing equipment; and record storage facilities.

• If cost estimates are expected to vary widely, agencies should present ranges of cost burdens and explain the reasons for the variance. The cost of purchasing or contracting out information collection services should be a part of this cost burden estimate. In developing cost burden estimates, agencies may consult with a sample of respondents (fewer than 10), utilize the 60-day pre-OMB submission public comment process and use existing economic or regulatory impact analysis associated with the rulemaking containing the information collection, as appropriate.

Generally, estimates should not include purchases of equipment or services, or portions

thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with

requirements not associated with the information collection, (3) for reasons other than

to provide information or keep records for the government, or (4) as part of customary

usual business or private practices.

Nearly all respondents have access to the internet and/or use of email. Those respondents who don’t have access to provide data electronically can provide data via telephone. Therefore, respondents need no additional equipment or technology for collection of IPP data other than the equipment already owned to conduct business; the company’s methods for maintaining its records are incidental to the IPP survey. Respondents’ total annual capital costs (both the total capital and start-up cost component and the total operation and maintenance and purchase of services component) due to the IPP survey are $0.

14. Provide estimates of the annualized cost to the Federal Government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), any other expense that would not have been incurred without this collection of information. Agencies also may aggregate cost estimates from Items 12, 13, and 14 into a single table.

For FY 2023, the collection and publication for data for the IPP Survey (both imports and exports) cost approximately $24 million. BLS spends approximately two-thirds of this amount on federal employee compensation and benefit costs.

15. Explain the reasons for any program changes or adjustments.

The annual number of responses for FY 2025, FY 2026, and FY 2027 decreased for both exports and imports because proposed changes in the sample design will result in fewer initiation and repricing respondents. Under the current sample design, IPP initiates 900 export and 1,300 import respondents in one year. For both export and import samples, the product universe is divided into two panels with one panel sampled one year and the other in the following year. 

The IPP is currently developing methodology to replace directly collected price information with unit value indexes (for some homogenous product areas) with the targeted implementation scheduled for FY 2025. This strategy will allow for a reduction in IPP’s sampling universe as fewer companies will be needed to support the Import and Export Price Indexes; in fact, the Program expects to reduce the import and export universes (and therefore, sample sizes) by approximately 33% each. This cut eliminates the need to divide the import and export universes into panels, a design that was borne of necessity for workload management by both BLS’ Field Economists and IPP’s National Office staff.

Under the new sample design, the IPP will sample from the entire (target) import universe and the entire (target) export universe in alternate years. The import sample size will be reduced from 2,600 companies over the course of two years (to cover the universe) to 1,800 companies. Similarly, the export sample size will be reduced from 1,800 companies over the course of two years to 1,200 companies. Field Economists will be given two years to initiate respondents for each sample. Therefore, an average of 900 import respondents and 600 export respondents will be initiated each year. The new sampling methodology is planned to be implemented beginning with an import sample fielded in FY 2025. The first export sample under the new design will be fielded in FY 2026. 

The replacement of directly collected pricing data with alternative data (and the reduction in sample size) will additionally result in a loss of repricing respondents.

The frequency of responses per year decreased for both imports and exports whereas the number of items repriced per respondent increased for both imports and exports. Although IPP survey methods prioritize monthly price collection for all sampled items (intended for initiation into the survey), participation in the IPP survey is voluntary. Respondents therefore decide how many items they will reprice and set their own repricing schedules. Repricing schedules are set according to how frequently and when price changes occur for the items and/or how often respondents are willing to provide price information. Index calculation methods are in place to address changes in periodicity of pricing.

Despite the slight increases in the number of items repriced per respondent, the annual time burden dropped primarily because of the lower number of respondents in initiation and repricing.

Despite higher average hourly pay rates (calculated by BLS’ Employment Cost Index) for both management, professional, and related employees and for sales/office employees, annual cost burden decreased because of the lower number of respondents in initiation and repricing.  

16. For collections of information whose results will be published, outline plans for tabulations, and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

The Harmonized Classification System is used for sampling, weighting, and the collection of data. Each published product group is composed of classification groups, constructed from homogeneous or related product categories in the Harmonized Tariff Schedule of the United States or Schedule B classifications. Index aggregation weights are now revised on a yearly basis and they reflect the constantly changing patterns of international trade more accurately. For the IPP’s goods indexes, the aggregation weights at the stratum¹² and detailed classification group levels consist of the universe trade dollar value totals that are published by the Bureau of the Census. Beginning in 2004, changes affecting the weights of products in the basket of goods bought and sold in foreign markets are made every January and reflect shifts in trade patterns from two years earlier. All services indexes are also reweighted each January and reflect shifts in trade patterns from two years earlier. The IPP began annual reweighting of Air Passenger Indexes in January 2007 and of Air Freight Indexes in January 2009.

Schedules sent to the regions for initiation by Field Economists are collected on a flow basis and some may remain in the field awaiting collection for up to four years. Respondents providing data via the web receive a notification to reprice on the second business day of the reference month (Attachments 6D-6E for newly-initiated web respondents and Attachment 6G for existing web respondents). Data collection continues for approximately five weeks; the indexes are released approximately one week later.

The merchandise price indexes are published using three different classification systems: the Harmonized Classification System (HS), the Bureau of Economic Analysis End Use System (BEA End Use), and the Foreign Trade North American Industry Classification System (NAICS). Since services are not covered in the published classification systems used for merchandise trade, price indexes for internationally traded services are published using two other definitions: the Balance of Payments (BOP), which represents transactions between U.S. and foreign residents; and international services indexes, which represent transactions “inbound to” and “outbound from” the U.S.

The IPP data are published in a monthly news release that includes a description of some of the highlights of import and export price movements over the past month. The release also includes tables that detail aggregate price indexes for each of the published classification systems. (An IPP news release is included as Attachment 16.) The release dates are announced in the fall of the previous year and are available online at http://www.bls.gov/schedule/news_release/ximpim.htm.

In addition to the news release, the IPP publishes more detailed tables that contain indexes and percent changes over the past four months for each of the Program’s published indexes. The IPP also offers full historical tables (http://www.bls.gov/web/ximpim.supp.toc.htm#long_tables) that show the index values for each published stratum dating back to when the series was first published. IPP outputs are available to the public by e-mail (using the BLS News Service) or on the internet (http://www.bls.gov/mxp/). Detailed analyses using international prices are also published periodically in the Monthly Labor Review and as Beyond the Numbers articles. (Attachments 17 and 18 are articles which reference IPP data, and which have been published in the Monthly Labor Review, accessible at http://www.bls.gov/opub/mlr/. Attachments 19-21 are Beyond the Numbers articles which reference IPP data, and which are available on the BLS website at http://www.bls.gov/opub/btn/. Attachment 22 is a BLS working paper and Attachment 23 is a chapter in Big Data for 21^st Century Statistics which both pertain to IPP data. Attachment 24 is a refereed journal article pertaining to IPP data which was published in the Journal of Official Statistics.)

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

The International Price Program requests authorization to not display the expiration date for OMB approval on the following materials:

• disaggregation worksheet / form 3008 (Attachment 12) – This material is generated in the Industrial Prices Systems (IPS) subsystem for which coding and testing sources are limited.

• B form / form 230 (Attachment 13) – The expiration date is not easily updated in IPP’s initiation system as there is no source file. Further, the Program will retire the B form with the implementation of a new initiation system in FY 2025.

• Checklists / form 231 (Attachment 14) – This material is generated in the IPS subsystem for which coding and testing sources are limited.

• Survey Unit Information (SUI) Listing / form 228 (Attachment 15) – This material is generated in the IPS subsystem for which coding and testing sources are limited.

18. Explain each exception to the certification statement.

Since the IPP is a voluntary survey and it imposes no recordkeeping requirement for respondents, the IPP does not indicate a retention period for recordkeeping requirements.

1 The Harmonized Tariff Schedule and Schedule B are organized into sections and chapters. A chapter is a collection of similar products,

aggregated at the two-digit level. For example, chapter 26 is reserved for ‘Ores, slag and ash,’ and chapters 25-27 make up section V (“Mineral

Products”).

2 These numbers are estimates subject to change due to differing relative values of U.S. imports and exports and to variations in response rates.

3 Initiation refers to the initial fielding for the collection of data to be used in repricing. Totals include the Field Economist’s visit to the company

as well as the time spent to select items for repricing using the disaggregation sheet (form 3008, Attachment 12).

4 Repricing refers to the update of price information previously provided by the respondent. The web application (Attachments 6I and 6J) is the

primary means of repricing but all collection types are included in these totals.

5⁵ During initiation, the respondent determines how many months data will need to be supplied in a given year based upon how often prices

change. On average, export and import companies are requested to supply information 9.0 months/year and 8.8 months/year, respectively.

6⁶ The average burden to reprice is currently estimated at 5 minutes per item, based upon internal testing. On average, an export respondent

submits price data on 5.184 items. Thus, the average response time is 5 minutes x 5.184 items = 25.920 minutes = 0.4320 hours.

7⁷ Rounded to the nearest hour.

8

The average burden to reprice is currently estimated at 5 minutes per item, based upon internal testing. On average, an import respondent

submits price data on 5.732 items. Thus, the average response time is 5 minutes x 5.732 items = 28.660 minutes = 0.4777 hours.

9 Rounded to the nearest hour.

10 Approximately 93 percent of IPP respondents can be categorized as a management, professional, or related employee in private industry

while about 7 percent can be categorized as a sales or office employee.

11 The 12-month ECI for management, professional, and related employees in private industry in the first quarter of 2023 was 4.3 percent; the

12-month ECI for sales and office employees in private industry was 5.7 percent. See footnote 10 for additional info related to the following

calculation: (4.3 x 0.936) + (5.7 x 0.074) = 4.4036 (weighted avg percent change in ECI per year, for both categories).

12 IPP uses the term “stratum” (pl. “strata”) to refer to a grouping of one or more classification groups which are homogenous with respect to

some characteristic and may experience similar price trends.