- The Washington Times - Thursday, March 15, 2007

12:40 p.m.

Inflation at the wholesale level surged in February, pushed higher by a big jump in energy prices and the largest increase in food costs in more than three years.

Wholesale prices rose by 1.3 percent last month, the biggest increase since November, the Labor Department reported yesterday. And even more worrisome, prices outside of the volatile food and energy sectors also showed a bigger-than expected increase of 0.4 percent last month. Toy prices rose at the fastest rate in more than two decades.

The 1.3 percent jump in wholesale prices was more than double the 0.5 percent rise that analysts had been expecting.

It was driven by a 3.5 percent jump in energy costs, which followed a 4.6 percent drop in January. The price of gasoline was up 5.3 percent in February and more pain at the pump is expected. The Lundberg Survey reported Sunday that the nationwide average for gasoline has risen by 20 cents per gallon in the past two weeks, hitting $2.55 per gallon in the latest survey.

The government’s Producer Price Index, which measures price pressures before they reach the consumer, showed that food costs shot up 1.9 percent in February, the biggest one-month gain since October 2003. The increases reflected freezes in winter growing areas, which pushed up the price of fruits and vegetables.

Core wholesale prices, which exclude food and energy, were up 0.4 percent, the biggest increase since November and double what Wall Street had been expecting.

The cost of toys and games rose by 2.3 percent, the biggest increase since February 1983.

The cost of light trucks, the category that includes sport utility vehicles, rose by 1.7 percent, the biggest gain since November, but the price of new passenger cars fell by 1.2 percent.

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