Wholesale Prices Rising at Fastest Pace Since 1981

High energy, motor vehicle costs pushing inflation; Fed may be forced to boost rates
By Newser Editors and Wire Services
Posted Aug 19, 2008 10:25 AM CDT
A worker waits as he delivers gasoline from his tanker truck at a Chevron gas station in San Francisco, Monday, Aug. 4, 2008. High energy costs are pressuring all corners of the market.   (AP Photo/Paul Sakuma)
camera-icon View 2 more images

(Newser) – Wholesale prices jumped 1.2% in July—more than twice the rate economists expected and  the fastest pace in 27 years, according to government data released today, the AP reports. Core prices, which exclude food and energy, rose 0.7%, the biggest since November 2006; new home construction in July fell to the lowest pace in more than 17 years.

The dismal report follows on the heels of last week’s consumer price report; July showed a 0.8% uptick with record per-barrel oil costs and $4.11 per gallon gasoline. The price spikes across the broader economy raised concerns that energy costs are pressuring all corners of the market and that the Federal Reserve might have to raise interest rates to stem inflation even in a flagging economic climate.