WASHINGTON – U.S. producer prices climbed 0.5 percent last month as energy prices resumed an upward march, but prices outside the volatile food and energy areas posted their smallest gain in four months, the government said Tuesday.
The overall rise in the Labor Department's producer price index, which measures prices received by farms, factories and refineries, was a touch above Wall Street expectations for a 0.4 percent gain, but the 0.1 percent advance in the so-called core index was a touch below.
Energy prices, which had plunged 4.7 percent in February, climbed 1.8 percent in March. Food prices increased 0.5 percent after a 2.7 percent drop.
The decline in energy prices came despite a 9.1 percent jump in the cost of gasoline, the biggest rise since November 2004. Natural gas costs fell 0.5 percent, residential electricity prices slid 0.7 percent and home heating oil dropped 3.6 percent.
Over the past year, producer prices have risen 3.5 percent, largely due to surging energy costs. But excluding food and energy, they are up just 1.7 percent.
A fading of last year's energy price pressures had pulled producer prices down at a 2.5 percent annual rate in the first three months of this year, but a renewed surge in oil costs could make that inflation relief temporary.
Oil jumped to a record high above $72 a barrel in London on Tuesday on worries a showdown over Iran's nuclear program could end up disrupting oil supplies.
Officials at the U.S. Federal Reserve will keep a close eye on inflation data due out this week after expressing concern that lofty prices for energy and other commodities could spark a wider inflation. On Wednesday, the Labor Department releases its closely watched consumer price index for March.