Prices of goods imported into the U.S. fell in September, reflecting a drop in fuel costs that has since reversed. The 0.3 percent decrease in the import-price index exceeded the median forecast of economists surveyed by Bloomberg News and followed a 0.6 percent gain in August, Labor Department figures showed today in Washington. Prices excluding fuel climbed 0.3 percent, led by industrial supplies like metals and chemicals. A 13 percent drop in the value of the dollar over the past four months is pushing up commodity costs even as the global economy cools, one reason why Federal Reserve policy makers last month said there were only “small odds” that deflation, or a protracted drop in prices, would take hold. At the same time, a lack of jobs is restraining consumer spending, giving companies like Samsung Electronics Co. little scope to raise 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.” Stock-index futures held earlier gains after the report, propelled by expectations the Fed will do more to support growth and a positive sales forecast from Intel Corp. The contract on the Standard & Poor’s 500 Index rose 0.8 percent to 1,173.6 at 8:36 a.m. in New York. Bigger Drop Economists forecast import prices would fall 0.2 percent, according to the median of 52 projections in a Bloomberg News survey. Estimates ranged from a drop of 0.8 percent to a gain of 0.5 percent. Compared with a year earlier, import prices were up 3.5 percent compared with a 4 percent increase in the 12 months ended August. They were forecast to rise 3.8 percent, according to the survey median. Year-over-year gains in import costs have cooled after exceeding 11 percent each month from January to April. The cost of imported petroleum decreased 3.1 percent in September from the prior month, while prices were up 5.8 percent from a year earlier. Excluding all fuels, import prices increased 2.6 percent from September 2009. 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. Prices Stagnate Today’s report showed prices of consumer goods excluding automobiles increased 0.1 percent in September. The cost of durable manufactured goods, like televisions and phones, was unchanged. 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 demand for electronics is stalling. 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. 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. 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 states was the first in almost two years of near-zero interest rates to say too-low inflation would warrant looser monetary policy. Fed Action 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 and “on possible steps to affect inflation expectations.” Policymakers “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. U.S. Treasury Secretary Timothy F. Geithner last week renewed his call for China to let its currency rise, in a speech to the International Monetary Fund that said countries with big foreign exchange reserves are distorting the global financial system. Geithner did not 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. U.S. export prices increased 0.6 percent, after rising 0.8 percent in August, today’s figures 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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