Washington - U.S. wholesale prices edged up in July, boosted by higher prices for electricity, cars and prescription drugs, the Labor Department said.
The Producer Price Index rose 0.2%, rebounding from a 0.1% drop in June. However, the closely watched core PPI, which strips out volatile food and energy costs, rose just 0.1% in July following a 0.2 gain in the prior month.
The overall PPI gain exceeded forecasts of U.S. economists in a survey, who had projected a 0.1% gain, but the core PPI increase matched the forecasts.
The data, however, prompted little market reaction, although bond prices softened on the higher-than-expected gain in the overall PPI figure. Traders remained focused on turmoil in emerging financial markets and President Clinton's sex scandal.
Energy costs were the main component of the PPI to show unexpected strength. They rose 0.3% in July after a 1.7% drop in June. Plummeting oil prices have sent energy costs tumbling this year, but in July the weakness was offset by a jump in electricity, likely tied to air conditioning use amid a heat wave in parts of the country.
Food prices last month rose 0.4% after a 0.1% rise in June. A surge in vegetable prices led that increase, although it was partly offset by a drop in pork prices.
The increase may have been linked to the expiration of aggressive discounts by U.S. auto makers at the end of June and to a nearly eight-week strike at General Motors Corp. that reduced the supply of new vehicles.
Economists also focused on the effects of cost increases in pharmaceuticals. Prescription drug prices rose 1.7% in the most recent month, continuing a string of sharp increases driven by a spike in the cost of tranquilizers.
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