Wholesale Price Jump 1% in January

Washington, DC, February 26, 2008 – Wholesale inflation soared in January due to higher costs for food, energy and medicine, according to the Labor Department.

Wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting.

The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years, since prices had risen at a 7.5 percent pace in the 12 months ending in October 1981.

The reading could affect how the Federal Reserve deals with lowering interest rates.

The 1 percent jump followed a 0.3 percent decline in December and was the largest one-month increase since a 2.6 percent increase in November.

Energy prices jumped 1.5 percent, as gasoline prices rose by 2.9 percent and the cost of home heating oil rose 8.5 percent.