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Housing starts surge; wholesale prices edge up

March 18, 2009|Associated Press

WASHINGTON — Wholesale prices edged up 0.1% in February as a big decline in food prices offset a second monthly increase in energy costs, the Labor Department reported Tuesday.

The increase was much lower than the 0.8% surge in January and smaller than the 0.4% increase economists had expected. Compared with a year earlier, wholesale prices are down 1.3%.

Core inflation, which excludes energy and food, edged up 0.2% in February, slightly higher than the 0.1% gain economists had expected. Core prices rose 0.4% in January.

The 0.1% rise in wholesale inflation in February reflected a 1.3% increase in energy prices, which have been rising for two months after having retreated for five straight months.

Gasoline prices jumped 8.7% after a 15% surge in January.

Food costs fell for a third straight month, dropping 1.6%, the biggest one-month decline in three years. The costs of eggs, fruits, vegetables and dairy products were all down.

Outside food and energy, prices for cigarettes rose 2.7%, the biggest increase in two years, while the price of light trucks rose 1.3%, a gain that is not expected to last given the weakness in auto sales.

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