Oct. 13 (Bloomberg) -- Prices of goods imported into the U.S. posted their biggest gain since 1990 in September, led by rising oil and natural gas prices after two hurricanes struck the U.S. Gulf Coast. Excluding oil, import prices gained 1.2 percent.

Import prices rose 2.3 percent after a 1.2 percent gain in August, the Labor Department said today in Washington. The increase excluding oil was the largest since record-keeping started in January 1989 because of increases in natural gas prices.

Prices for imported oil, natural gas and other raw materials surged after Hurricanes Katrina and Rita slammed into the Gulf Coast, snarling port traffic and shutting down production and refining facilities. The Federal Reserve is warning of quickening inflation, and some companies such as consumer-goods producer Georgia-Pacific Corp. are passing on the additional costs to customers.

``Because of refinery damages and shutdowns, gasoline and other refined products prices soared,'' said Zoltan Pozsar, chief economist at Economy.com in West Chester, Pennsylvania, before the report. ``Due to improved pricing power, companies will easily be able to pass the increases on to consumers.''

Import prices were expected to rise 1.0 percent, the median forecast in a Bloomberg News survey of 36 economists. Estimates of the increase ranged from 0.2 percent to 2.3 percent.

The August import price index excluding petroleum, previously reported as little changed, was revised to a 0.1 percent increase.

Dollar's Value

The value of the U.S. dollar rose as much as 4.5 percent this year against a basket of currencies of major trading partners and is helping to curb gains in import prices. The dollar is still up about 2.5 percent so far this year.

The import price index is the first of three monthly price measures. The government will report its consumer price index for September tomorrow, followed Oct. 18 by the producer price index. Economists surveyed by Bloomberg News expect consumer prices to rise 0.9 percent, nearly double the 0.5 percent of the previous month and the biggest monthly increase since January 1990.

While Katrina and Rita, which hit Texas on Sept. 24, spurred energy price gains, they also slowed growth in the third quarter, economists said. The U.S. economy probably grew at a 3.6 percent annual rate from July through September, according to the median forecast in the latest Bloomberg survey of economists, taken after Katrina struck the Gulf Coast on Aug. 29. That compares with the median 4.1 percent economists predicted a month before.

Prices for all imported goods last month were 9.9 percent higher than in September 2004, compared with a 7.9 percent year-on- year increase in August. Excluding petroleum, prices were up 3.0 percent in the last 12 months. The ex-petroleum figure includes natural gas, which increased 29 percent.

Fed Action

Fed policy makers meet Nov. 1, and economists expect them to raise their benchmark interest rate by a quarter point, to 4 percent, for a 12th straight time to quell inflation. The Fed raised the rate on Sept. 20 by a quarter point.

Fed officials have stepped up inflation warnings in recent weeks as energy prices surged. Dallas Fed Bank President Richard Fisher warned Oct. 6 that Fed policy makers must prevent an ``inflation virus'' from infecting the economy and that inflation was moving towards the ``upper end of the Fed's tolerance zone.''

The average price of crude oil on the New York Mercantile Exchange rose to $65.55 a barrel in September from an average $64.99 a barrel in August. Prices have since fallen. Natural gas prices rose to an average $12.11 per million British thermal units in September from $9.34 per million Btu in August.

Georgia-Pacific Corp., the world's biggest tissue maker, plans to raise prices to offset higher energy costs, Chief Executive Pete Correll, chief executive of the Atlanta-based company, said in an Oct. 7 interview.

``The energy shocks and the absorption of those costs into our system are putting real pressure on all of our businesses to increase their prices,'' said Correll. ``People are very understanding and willing to give us cost-recovery type increases.''

Oil Output

Hurricanes Rita and Katrina halted about 9 percent of the Gulf's annual oil output and about 7 percent of its natural gas production between Aug. 26 and Oct. 7, the Interior Department said on Oct. 7.

The Gulf region accounts for about 30 percent of U.S. oil output and 24 percent of U.S. natural-gas production.

The price of imported petroleum and petroleum products rose 7.3 percent last month, after rising 6.0 percent the previous month, today's report showed. Compared with a year earlier, the price of imported petroleum rose 49 percent.

Prices for industrial supplies excluding petroleum rose 5.0 percent, led by higher prices for natural gas, after increasing 0.5 percent the month before. The cost of imported capital goods were unchanged for a second previous month. Those prices are down 0.3 percent from a year earlier.

U.S. steel prices jumped 15 percent in September, the first monthly gain in a year, reflecting gains in raw materials after Katrina, said Purchasing Magazine, a pricing publication.

``We're seeing a healthy order rate and we're able to increase prices and that's commensurate with the fact that a lot of the raw materials' prices have gone up,'' said Daniel DiMicco, chief executive of Nucor Corp., the second-biggest U.S. steelmaker, in an interview in Seoul on Oct. 4.

Consumer Goods

Prices for imported consumer goods excluding autos rose 0.3 percent. Prices of imported automobiles, parts and engines rose 0.1 percent for a second month.

Ford Motor Co., the second-largest U.S. automaker, replaced employee-discount pricing on Oct. 4 with rebates of as much as $3,000 on its sports-utility vehicles, and combinations of rebates and no-interest loans on most 2005 and 2006 models, the Dearborn, Michigan-based company said.

Ford is trying to set ``any kind of incentive or dollar figure that will prop up demand'' for the SUVs, said auto analyst Erich Merkle at IRN Inc., a consulting firm in Grand Rapids, Michigan.

Prices of goods from China fell 0.2 percent after rising 0.1 percent in August. Compared with a year ago, prices were down 1.2 percent. Prices of textiles and related items, a major export for China, rose 0.2 percent.

Goods prices from Japan rose 0.2 percent after falling 0.2 percent. Products from the European Union rose 1.4 percent after falling 0.1 percent. Canadian goods prices rose 4.5 percent after rising 1.1 percent.

Prices of U.S. products exported to other countries rose 0.9 percent after falling 0.1 percent in August. Prices for farm exports fell 1.4 percent, while those for non-farm exports rose 1.1 percent.

To contact the reporter on this story: Bob Willis in Washington bwillis@bloomberg.net

Last Updated: October 13, 2005 08:30 EDT