POSTED AT 12:54 PM EDT Thursday, October 12

Oil prices boost U.S. import costs

Reuters News Agency

Washington  U.S. import prices rose last month, boosted by a big rise in petroleum costs, the government said Thursday.

The U.S. Labor Department said import prices rose a stronger-than-expected 1.5 per cent in September after rising 0.2 per cent in August. Economists polled by Reuters had expected a 0.6 per cent gain in import prices last month.

Excluding volatile petroleum prices, U.S. import prices fell 0.3 per cent.

Petroleum import prices rose 14.1 per cent in September after edging up a slight 0.1 per cent in August. Last month's gain was highest since a 14.9 per cent rise in February. Over the past year, petroleum import prices have surged 53 per cent.

U.S. oil prices topped $37 a barrel last month, the highest price since the Gulf War, according to U.S. Energy Department figures. Last month's hike resulted from tight oil supplies and heavy demand for petroleum products.

Because most of the oil consumed in the United States is purchased from abroad, the energy price rise is helping to bloat the already mammoth trade deficit, which grew in July  the most recent month for which data is available  to a record $31.89 billion.

A ballooning trade gap is one of the economic imbalances that has Fed officials concerned.

Prices on industrial supplies and materials imports, another key component of the government index, rose 5.3 per cent last month after gaining 0.6 per cent in August.

Meanwhile, import prices on food, feed and beverages fell 0.7 per cent last month after gaining 0.4 per cent in August, while prices of capital goods dipped by 0.1 per cent after dropping 0.2 in August.

Prices of imported automobiles and parts fell by 0.2 per cent, after posting the same decline the previous month.

U.S. export prices rose 0.5 per cent in September after falling 0.3 per cent in August. Export prices on agricultural products rose by 3.2 per cent, the largest gain since a 4.8 per cent rise in April 1996.

Prices on food, feed and beverage exports rose 3.0 per cent last month, posting the largest gain since a 3.4 per cent rise in May of 1996, the Labor Department said.

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-- Martin Thompson (mthom1927@aol.com), October 12, 2000