Reply #39: Inflation Inches Up on Wholesale Level [View All]

[54anickel]

http://biz.yahoo.com/ap/060815/economy.html?.v=9

WASHINGTON (AP) -- Inflation at the wholesale level edged up by the smallest amount in five months in July as falling food prices helped offset another rise in energy costs.

The Labor Department reported that wholesale prices increased a slight 0.1 percent in July, far below the 0.5 percent jump in June. The improvement reflected a retreat in food prices, which fell by 0.3 percent in July, after having surged by 1.4 percent in June, which had been the biggest increase in nearly two years.

Federal Reserve policy-makers broke a two-year string of interest rate increases last week, saying they believed that a slowing economy would help restrain inflation pressures. But some private economists are worried that the relentless rise in energy costs could force the Fed to resume rate increases in coming months.

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Price pressures have been accelerating this year as energy costs have soared, reflecting rising tensions in the Middle East and tight supplies because of increased demand from emerging economies such as China.

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Those higher energy costs were expected to show up quickly in higher consumer energy bills. Analysts were forecasting that the Consumer Price Index would register a 0.4 percent increase for July when that figure is released on Wednesday.

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