Wholesale prices rise in March as food costs jump

WASHINGTON — Wholesale prices rose more than expected last month as food prices surged by the most in 26 years.

The Labor Department said the Producer Price Index rose by 0.7 percent in March, compared to analysts' forecasts of a 0.4 percent rise. A rise in gas prices also helped push up the index.

Still, there was little sign of budding inflation in the report, which measures price changes before they reach the consumer. Excluding volatile food and energy costs, wholesale prices rose by 0.1 percent, matching analysts' expectations.

Food prices jumped by 2.4 percent in March, the most since January 1984. Vegetable prices soared by more than 49 percent, the most in 15 years. A cold snap wiped out much of Florida's tomato and other vegetable crops at the beginning of this year.

Gasoline prices rose 2.1 percent, the department said, the fifth rise in six months.

In the past year, wholesale prices are up 6 percent, with much of that increase driven by higher oil prices. But excluding food and energy costs, they have risen only 0.9 percent.

Consumers are facing smaller price increases, as many retailers are reluctant to pass on higher costs. Last week, the Labor Department said the consumer price index rose only 0.1 percent in March. Excluding food and energy, the core consumer index was unchanged.

Core consumer prices rose by just 1.1 percent in the past 12 months, the department said last week, the best showing since January 2004.

Low inflation has enabled the Federal Reserve to keep the short-term interest rate it controls at a record low of near zero in an effort to boost the economy.

The country's worst recession since the 1930s has kept a lid on prices, as high unemployment and tight credit have crimped consumers' spending power. That has made it harder for companies to raise prices.

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Comments » 1

easygoings writes:

How can food prices go up due to fuel pricing increase ??

That was what the claim was last year when gasoline ( price gouging occurance ) reach almost 5.00 dollar plus per gallon...

However grocery prices didn't go back down when the gasoline prices did???

Would someone like to explain that one...

I bet half of Floridas' crops weren't frozen out afterall can't always believe what you hear in the media...Get real Florida isn't the only place that grows tomatos and vegetables ... to my understanding I thought Flordia was know for their Oranges...Haven't heard those mentioned...

For Example;

Corn last year with the floods up North

Media stated that the price of corn would skyrocket and most of the crops had been wiped out

When harvest time game the farmers had reseeded and due to the rain had ended up with a crop that yeilded more and better product then it had in 20ty years..but the corn prices still rose..

So you tell me what is going on....

Don't believe what you hear always and follow up with your Senators and Governors to find out what is really happening ...

Last year when the price gouging was occurring does anyone really think anything would had been done about it if the average person keep quite and went along with the huge increases that didn't add up.....

Companys' shouldn't be raising prices during this hard economic times...

I say everyone harvest their own garden , buy a couple of chickens and hens , see where the prices go from there...

It worked with the gasoline crisis...


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