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Soaring gas costs push up wholesale prices 1.1%

October 12, 2012|By Tiffany Hsu

Ballooning gasoline prices and high food costs propelled wholesale prices in September to their fourth straight increase, according to the Labor Department.

The producer price index for finished goods was up a seasonally adjusted 1.1% last month after rising 1.7% in August. Analysts had expected a more subdued boost.

Combined with August, the index made its largest two-month surge since the summer of 2008, when commodity prices went through the roof, according to Credit Suisse analysts.

Rocketing energy costs made up a major portion of the increase, rising 4.7% from a 6.4% leap the month before.

Some 80% of the energy swell came from the gasoline market, where wholesale prices heaved up 9.8% last month.

The October numbers may show another jump after a sudden run-up in gas prices in California over the weekend, reaching a record $4.671 for a gallon of regular.

Food prices are also high, rising 0.2% in September in their fourth consecutive upswing. Dairy prices, which are up 2.8%, led the charge. Fresh fruit is also costing more.

Wholesale inflation overall was up 2.1% compared to the same period in 2011, marking the largest increase since March.

ALSO:

IMF warns of 'alarmingly high' risk of deep global slowdown

World food prices rose 10% in July, pushed by Midwest drought

Economists predict slow growth, low recession risk in coming year

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