Caleb Tollefson stocks a display of nectarines and peaches at a Hy-Vee grocery store in Sioux Falls, S.D. The Midwest drought has made corn, soybeans, and other grains much more expensive.
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WASHINGTON — A sharp rise in gasoline costs drove up wholesale prices last month by the most in more than three years. But outside energy and food, price gains were mild.
The producer price index, which measures price changes before they reach the consumer, jumped 1.7 percent in August, the Labor Department said Thursday. The increase was mostly because gas prices soared 13.6 percent, the biggest gain in three years.
Food prices rose 0.9 percent, driven up by steep increases in the cost of eggs and dairy products. Excluding the volatile food and gas categories, core wholesale prices rose only 0.2 percent, below July’s increase.
In the past 12 months, wholesale prices have increased 2 percent, a mild gain and far below the recent peak of 7.1 percent in July, 2011. Core wholesale prices have risen 2.5 percent in the past year, the same annual pace as in July. Food prices are likely to rise further in the coming months as the Midwest drought has made corn, soybeans, and other grains much more expensive.
But overall, economists aren’t worried that inflation is rapidly accelerating. With U.S. economic growth weak and unemployment high, workers’ wages are barely keeping up with inflation. That means consumers won’t be able to pay much higher prices.