Wholesale Prices in U.S. Rise Most in Three Years on Oil
By Michelle Jamrisko and Shobhana Chandra - Sep 13, 2012 8:55 AM ET
Wholesale prices in the U.S. increased in August by the most in more than three years, reflecting a surge in energy costs.
The producer price index climbed 1.7 percent after an increase of 0.3 percent in July, the Labor Department reported today in Washington. The median estimate in a Bloomberg survey of 79 economists called for a 1.2 percent gain. Core wholesale inflation, which excludes volatile food and energy prices, rose 0.2 percent, in line with forecasts.
Companies may find it difficult to pass on higher energy costs as the global economic slowdown and so-called fiscal cliff of higher taxes and government spending cuts prompt their customers to limit spending. The absence of broad-based price increases gives Federal Reserve policy makers, who meet today, room to provide more monetary stimulus for the economy.
“Outside of energy, producer prices for the most part are pretty contained,” said Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “I don’t think the Fed is going to be too concerned. The Fed is going to take today’s report as consistent with their view that the run-up in energy is transitory.”
MORE...
http://www.bloomberg.com/news/2012-09-13/wholesale-prices-in-u-s-rise-most-in-three-years-as-oil-surge.html