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Import Prices in U.S. Increase for Third Consecutive Month

Nov. 9 (Bloomberg) -- The cost of goods imported into the U.S. unexpectedly climbed in October, led by increases in energy expenses that have since been reversed as global growth cooled.

The 0.5 percent increase in the import-price index followed a 1.1 percent gain in September and a 1.2 percent advance in August, Labor Department figures showed today in Washington. The median forecast of 47 economists in a Bloomberg survey called for no change. Prices rose 0.4 percent over the past 12 months.

Import costs may moderate from here on, restrained by a slowdown from Europe to Asia that’s limiting demand for commodities including oil. American companies may also hold the line on prices to avoid losing customers and sustain the pickup in consumer spending as the job market improves.

“The outlook on prices is reasonably subdued,” David Sloan, a senior economist at 4Cast Inc. in New York, said before the report. “Global demand is fairly modest,” he said, and “oil costs have lost momentum.”

Projections in the Bloomberg survey ranged from a drop of 1.1 percent to a gain of 0.6 percent. Compared with a year earlier, import prices were forecast to drop 0.5 percent.

The cost of imported petroleum increased 1.3 percent from the prior month, and was 1.9 percent higher than a year earlier.

Excluding all fuels, import prices increased 0.3 percent from the prior month, the most since March, and were up 0.1 percent from October 2011.

The increase in non-fuel imports was led by gains in automobiles and pharmaceuticals.

Imported Autos

Costs of imported automobiles, parts and engines climbed 0.3 percent from the prior month. Consumer goods excluding vehicles showed a 0.2 percent advance.

Imported capital goods prices were up 0.1 percent.

Crude oil prices have fallen 15 percent this year. The contract for December delivery rose 0.8 percent from a four- month low to reach $85.09 a barrel yesterday on the New York Mercantile Exchange.

Contained raw materials costs are helping manufacturers like Neenah Paper Inc. The Alpharetta, Georgia-based paper maker said pulp prices in the fourth quarter are expected to decline in North America and increase slightly in Germany.

“With weakened global demand, prices for most other raw materials are expected to stay in line with the third quarter,” John O’Donnell, chief executive officer, said on a Nov. 7 conference call with analysts. “Looking ahead into 2013, expectations are for modest increases in most input costs.”

Today’s report also is consistent with Federal Reserve policy makers’ view that inflation will stay within their goal. The import-price index is the first of three monthly price gauges from the Labor Department. Producer prices are due on Nov. 14, and the consumer-price index a day later.

U.S. export prices were unchanged after increasing 0.8 percent the previous month, today’s figures showed. Prices of farm exports fell 1.9 percent, while those of non-farm goods climbed 0.2 percent.

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