Washington – Surging costs for gasoline and other energy products fueled inflation at the wholesale level in August, pressure that is expected to become even more intense once the full impact of Hurricane Katrina is felt.
The Labor Department said its Producer Price Index, which measures inflation before it reaches the consumer, jumped a sharp 0.6 percent in August following an even bigger 1 percent increase in July.
In other news, the Commerce Department reported that oil imports hit an all-time high in July and the trade gap with China also set a record. However, the overall trade deficit improved slightly to $57.9 billion as exports rose and imports outside of energy fell.
The PPI report showed that energy prices jumped 3.7 percent in August, led by a 9.5 percent rise in gasoline costs.
