Companies in the United States paid higher prices for tobacco, pickup trucks and pharmaceuticals in July, driving wholesale inflation up by the most in six months.
This measure of inflation, which excludes volatile food and energy prices, is known as the core Producer Price Index. It rose 0.4% in July -- biggest increase since January.
The overall index, which measures all price changes before they reach the consumer, rose 0.2% last month, the U.S. Labor Department said Wednesday. That follows a 0.4% drop in June, first decline in 17 months.
A key reason for the increase in the core index was a 2.8% surge in tobacco prices -- the most in more than two years. That accounted for about a quarter of the rise in the core index. Pickup truck prices rose 1%.
Gas prices fell for a second month. Food costs rose 0.6%, biggest rise since February.
The PPI has increased 7.2% the past 12 months. That's up sharply from earlier this year but below May's rise of 7.3 %, which was the biggest in two and a half years.
The core index has increased 2.5% in the past 12 months, the most since June 2009.
Falling oil and gas prices are reducing inflation pressures. That's a reversal from earlier this year, when food and gas prices spiked and caused the Producer Price Index to jump 1.5% in February, after a 1% gain the previous month.
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