Washington – A big jump in gasoline prices pushed inflation at the wholesale level up in March at the fastest pace in three months, as oil prices above $70 a barrel sent consumers a high-octane warning of expensive fuel costs ahead.
The Labor Department reported Tuesday that wholesale prices rose by 0.5 percent in March following a 1.4 percent decline in February, which had been the largest drop in nearly three years.
The March increase was slightly worse than the 0.4 percent rise that Wall Street had been expecting and was driven by a 9.1 percent surge in gasoline prices, the biggest one-month gain since November 2004.
In other economic news, the Commerce Department reported that construction of new homes dropped by 7.8 percent in March. It was the fourth decline in the past six months and provided further evidence that the nation’s five-year housing boom is quieting down.
The decline pushed the construction of new homes down to a seasonally adjusted annual rate of 1.960 million units, the lowest rate in a year. Housing construction had surged by 16 percent in January, reflecting warm weather, but then fell by 7.8 percent in February.
The 0.5 percent overall increase in the Producer Price Index, which measures inflation pressures before they reach the consumer, was the biggest one-month gain since a 0.8 percent increase in December, a jump that was also driven by surging energy prices.
However, outside of the volatile energy and food sectors, core inflation rose by 0.1 percent, leaving core inflation rising by a moderate 1.7 percent over the past 12 months.
