Wholesale prices experience biggest leap since 1998.(Brief Article)

Fuel Oil News, April, 2005

Wholesale prices rose 0.3 percent in January, driven by big increases in the cost of new cars, cigarettes and alcohol, the government reported in February.

The Labor Department said the increase in its Producer Price Index, designed to track price pressures before they reach the consumer, reversed a 0.3 percent decline in December.

Widespread increases in a number of areas drove the core inflation rate, which excludes food and energy, up 0.8 percent, the biggest increase in this area since December 1998.

The sharp increase in core inflation, if it were to continue, would certainly raise worries at the Federal Reserve that price pressures were beginning to heat up. The Fed has been raising interest rates at a gradual pace since last June in...

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