Import Prices in U.S. Fell in September, Reflecting Drop in Oil
Import Prices in U.S. Fall, Reflecting Drop in Oil
Angela Greiling Keane/Bloomberg
Compared with a year earlier, import prices were up 3.5 percent compared with a 4 percent increase in the 12 months ended August.
Compared with a year earlier, import prices were up 3.5 percent compared with a 4 percent increase in the 12 months ended August. Photographer: Angela Greiling Keane/Bloomberg
The cost of goods imported into the U.S. fell more than forecast in September, contributing to a slowdown in inflation that is concerning the Federal Reserve.
The 0.3 percent decrease in the import-price index exceeded the 0.2 percent drop projected by the median forecast of 52 economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The 3.5 percent gain over the past 12 months was the smallest year-over-year increase since November.
The cost of consumer goods made overseas has stagnated as a lack of jobs restrains consumer spending and gives companies like Samsung Electronics Co. little scope to raise prices. A 13 percent drop in the dollar over the past four months may keep pushing up the value of raw materials even as the global economy cools, one reason why Fed policy makers say there is little risk of deflation, or a protracted drop in prices.
“Inflation is still too low and the Fed would like to see it reaccelerate,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “There’s a tremendous amount of slack in the economy.”
Stocks climbed, propelled by expectations the Fed will do more to support growth. The Standard & Poor’s 500 Index rose 0.6 percent to 1,177.49 at 10:35 a.m. in New York.
Estimates of economists surveyed by Bloomberg ranged from a drop of 0.8 percent to a gain of 0.5 percent. Last month’s decrease following a 0.6 percent advance in August.
Metals, Chemicals
Prices excluding fuel climbed 0.3 percent, led by industrial supplies like metals and chemicals.
The import-price index is the first of three monthly price gauges from the Labor Department. Figures on producer prices are due tomorrow and the consumer price index on Oct. 15. The Bloomberg survey medians indicate both measures will show smaller gains for last month.
Today’s report showed prices of consumer goods excluding automobiles increased 0.1 percent in September and were up 0.3 percent over the past 12 months. The cost of durable manufactured goods, like televisions and phones, was unchanged last month, capping a 1.6 percent decrease since September 2009. It was the weakest 12-month performance since November 2002.
Samsung, Asia’s biggest maker of semiconductors, flat screens and mobile phones, last week reported profit that missed analysts’ estimates, fueling concern the global recovery in electronics is stalling.
Prices at Samsung
Prices of Samsung LCDs used in computers and TVs fell 7.8 percent in the third quarter, according to estimates at Royal Bank of Scotland Group Plc. The weak demand and an oversupply of chips, panels and televisions may further pull down prices, hurting profitability at Samsung and rivals including LG Display Co., analysts said.
U.S. central bankers are debating the effects additional monetary stimulus would have on prices as they try to support the economy. The Fed’s Sept. 21 statement was the first in almost two years of near-zero interest rates to say too-low inflation would warrant looser monetary policy.
The Federal Open Market Committee next meets Nov. 2-3. Minutes from their Sept. 21 meeting, released yesterday, showed policy makers discussed “several possible approaches” to supporting economic growth, mainly purchasing longer-term Treasury securities. Policy makers “saw only small odds of deflation,” according to the minutes.
The cost of goods from China dropped 0.2 percent, while those from Japan climbed 0.1, today’s report showed.
Geithner, China
U.S. Treasury Secretary Timothy F. Geithner renewed his call for China to let its currency rise in a speech last week to the International Monetary Fund. Countries with big foreign exchange reserves are distorting the global financial system, he said.
Geithner didn’t cite China by name, instead referring to countries whose currencies are “significantly undervalued,” which is the phrase the U.S. has used to describe the yuan’s relationship to the dollar. He also reiterated that promoting growth should be the top priority for the world’s economies and that countries should not rely on exports to the U.S. to keep their economies healthy.
The cost of U.S. exports increased 0.6 percent after rising 0.8 percent in August, today’s report from the Labor Department showed. Prices of farm exports climbed 2.4 percent, while those of non-farm goods increased 0.3 percent.
To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
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