MercoPress. South Atlantic News Agency

US wholesale prices jumped 0.5% in June

United States wholesale prices rose by a steeper than expected 0.5% in June as food prices and energy costs posted their highest gain in thirty months, according to data from the US Labour Department.

The rise in the producer price index - a measure of prices received by farms, factories and refineries ? outstripped Wall Street expectations with food costs soaring 1.4% in June the biggest gain since October 2004. Energy costs rose 0.7% on the back of a 0.4% gain in May.

The rise in June energy prices at the producer level reflected a 6.3% jump in gasoline prices, a 6.5% gain in home heating oil and a 1.8% rise in liquefied petroleum gas. However the Labour Department said core prices, leaving out food and fuel costs, rose 0.2%, in line with forecasts.

This Wednesday the Labour Department is scheduled to release its report on June consumer prices, a key inflation measure for any Federal Reserve decision on interest rates next August. Also on Wednesday, Fed chairman Ben Bernanke will be delivering the central bank's six month monetary policy report, which will be closely scrutinized for clues of future interest rate movements.

The Federal Reserve has increased federal funds rate to 5.25% from 1% in 17 straight quarter-point steps dating back to June 2004. Financial markets see a 50/50 chance of another hike or a pause at the Fed's next meeting on August 8.