U.S. inflation at the wholesale level jumped in January, pushed higher by rising costs for energy, food, and medicine, the government said in a report Tuesday showing that over the past 12 months, producer inflation rose at the fastest pace in 16 years. The Labor Department said producer prices rose 1 percent last month, more than double the 0.4 percent rise expected by economists. “Core” producer prices, which exclude volatile energy and food costs, rose a bigger-than-expected 0.4 percent, the sharpest increase in 11 months. The gain was led by a 1.5 percent increase in the cost of prescription and non-prescription drugs. The 1 percent jump in wholesale prices followed a 0.3 percent decline in December and was the biggest monthly increase since a 2.6 percent increase in November, driven by sharply higher energy costs. Including January's jump, wholesale prices have risen over the past 12 months by 7.5 percent, the fastest increase since the autumn of 1981, when the United States was deep in recession. According to the report, energy prices rose 1.5 percent in January and were up 22.6 percent over 12 months. Gasoline prices gained 2.9 percent in the month and soared 48.1 percent over the year. Reflecting higher commodities prices, finished consumer food prices rose 1.7 percent in January, the steepest gain since a similar increase in October 2004.
