US Wholesale Prices Increased in July

Posted August 17th, 2011 at 9:55 am (UTC-5)
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The U.S. says the price for wholesale goods increased in July.

The government said Wednesday that wholesale prices — the price manufacturers pay for goods and materials before they reach consumers — advanced two-tenths of a percent in July, twice what economists had forecast. Excluding the volatile food and energy categories, the closely watched core index increased four-tenths of a percent, the most since January.

The U.S. said the price of food, pharmaceuticals, pickup trucks and tobacco increased, even as gas prices fell for the second straight month. The government said that wholesale tobacco prices — which could eventually affect the one-fifth of Americans who smoke — jumped 2.8 percent in July, the most in more than two years.

In the past year, the Producer Price Index measuring wholesale prices in the U.S. has jumped by more than 7 percent. But key financial officials in the U.S., including Federal Reserve chairman Ben Bernanke, and private economists have said they believe that price increases will be temporary and that inflationary pressures in the coming months will remain limited.

The Federal Reserve has vowed to keep its key interest rate at nearly zero for another two years. Meanwhile, high unemployment in the U.S. has constrained workers from pressing for higher wages, which in turn has kept companies from sharply increasing prices on their products.