Import prices rise in June, fueled by energy costs

Effects likely to spread, though prices unchanged excluding petroleum

Economy

July 14, 2000|By BLOOMBERG NEWS

WASHINGTON - Prices of U.S. imports rose in June, led almost exclusively by a jump in energy costs that is threatening to push up prices for products beyond gasoline and home heating oil.

The index of imported prices increased 0.8 percent last month after rising 0.3 percent in May, the Labor Department said yesterday. Excluding petroleum, import prices were unchanged last month after falling 0.2 percent in May.

"Petroleum costs are clearly an issue and they're beginning to show up" in other goods, said Joel L. Naroff, president of Naroff Economic Advisors Inc. in Holland, Pa.

The Labor Department also said first-time claims for unemployment benefits rose 27,000 to 319,000 in the week ended July 8. While that is the highest in more than a year, the government noted temporary shutdowns as automakers retool assembly plants for the new model year.

Procter & Gamble Co. and Kimberly-Clark Corp., the two largest U.S. makers of diapers, have announced they will raise prices by an average of 6 percent to make up for higher costs of paper pulp as well as oil, from which synthetic fibers in the diaper liners are made. Nabisco Holdings Corp., maker of Oreo cookies and Ritz crackers, plans a 2 percent increase in cracker and cookie prices in the second half of the year.

"You need energy to produce Oreo cookies and Huggies diapers," said Sung Won Sohn, chief economist at Wells Fargo & Co.

June prices for imported petroleum, used in products from gasoline to chemicals to asphalt, rose 7 percent after a 4.8 percent increase in May, the Labor Department report showed. Last month's increase was the largest since a 14.9 percent rise in February. The cost of imported oil is up 80.2 percent since June 1999.

The cost of natural and manufactured gas, used to power plants and make nylon and other goods, rose 9.9 percent after a 2.7 percent decline the month before. The price was up 72 percent from 1999.

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