Washington, DC, Sept. 12--Wholesale prices rose in August amid a surge in food and energy prices.
The producer-price index for finished goods rose 0.4%, four times the rate in July, the Labor Department said Friday. But the closely watched core index, which excludes food and energy items, rose just 0.1%, half July's rate. That gauge suggests there is still no fundamental inflation pressure aside from the volatile food and energy sectors.
Economists had expected a 0.3% increase in the overall index and no change in the core index, according to a survey by Dow Jones Newswires and CNBC.
The Labor Department said the acceleration in producer prices mainly reflected higher food prices. Those prices, which account for about 21% of the index, increased 0.7%, the fastest clip in five months. Energy prices rose 1.2%, four times the rate in July.
But prices of most other products moderated. Prices of capital equipment rose 0.1% after a 0.4% increase in July. Prices of passenger cars rose 0.3%, down from 0.4% in July. Prices of prescription drugs rose 0.3%, half the rate in July. Tobacco prices were unchanged. Computer prices declined for a fourth consecutive month, falling 1.5%.
Despite recent signs of a pickup in the economic recovery, Federal Reserve policy makers have remained cautious. Some of them worry that the persistent reluctance of employers to hire workers despite the brightening economic outlook could stall the recovery.
