US producer prices rose twice as fast as expected last month on soaring energy costs, government data showed today.
The US Labour Department said the producer price index rose 1 per cent in July. Prices for finished energy goods jumped 4.4 per cent, the biggest rise since October 2004, while finished consumer food prices fell 0.3 percent. Outside of those volatile areas, so-called core producer prices climbed 0.4 per cent.
Wall Street economists had expected overall producer prices to rise 0.5 per cent, with core prices up 0.1 per cent.
The index, a gauge of prices received by farms, factories and refineries, followed a steady reading in June and offered the latest sign that inflation pressures, excluding energy costs, remain moderate.
The department said yesterday that June consumer prices rose 0.5 per cent but were up a much milder 0.1 per cent excluding food and energy costs. Oil prices have spiked to $66 a barrel and are averaging $12 more a barrel for the full year than in 2004.
The producer price report showed a 1.5 per cent increase in car prices and a 1.4 per cent rise in prices for light trucks and SUVs. Stripping out car and light truck prices, core PPI rose just 0.2 per cent last month.
But further back in the production pipeline, intermediate goods prices climbed a steep 1.0 per cent, while prices for crude goods jumped 6.7 per cent.