- The Washington Times - Thursday, February 19, 2009

Inflation at the wholesale level shot up a surprising 0.8 percent last month, the biggest increase since July because of a surge in gasoline and energy prices, the Labor Department reported Thursday.

Economists had expected prices to increase a mere 0.2 percent at the wholesale level — prices that are paid before they reach the consumer — after falling 1.9 percent in December and 0.9 percent for all of 2008, the first annual decline since 2001.

A 3.7 percent jump in energy prices, including a whopping 15 percent in the cost of gasoline, pushed wholesale prices to their biggest increase in 14 months, the Labor Department said.

The price for a barrel of oil reached more than $147 in July, which translated to more than $4 a gallon for gasoline in many parts of the country and more than $5 in some sections. The pump price of gasoline is over $2 a gallon now.

Inflation at the wholesale level could show up among retailers at a time when they are trying to hold the line on prices in order to lure buyers, who are wary about spending money during the worst recession in more than 70 years.

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