Higher energy costs pushed producer prices up a slightly more-than-expected 0.7 per cent in April.
Excluding volatile food and energy costs, however, prices paid at the factory gate were unchanged.
Overall producer prices rose 3.2 per cent from the same month a year ago, while core producer prices gained 1.5 per cent from April 2006.
Analysts were expecting producer prices - the prices paid by manufacturers and wholesalers - to rise 0.6 per cent and by 0.2 per cent when energy and food were excluded.
Energy prices gained 3.4 per cent, while food prices rose 0.4 per cent in April. It was the smallest gain in food prices since November
Producer prices are a measure of prices before they reach the consumer. The Federal Reserve says its predominant concern about the economy is that inflation may fail to moderate, but the US central bank has forecast that price pressures should ease amid steady but sluggish growth.