US wholesale prices shoot up 3.4 per cent over past year

WASHINGTON — U.S. wholesale prices rose 0.3 per cent in June, a slight slowing from May. But the 12-month gain was the fastest in more than six years, adding to evidence that inflation is beginning to rise after years of weak price gains.

The Labor Department said Wednesday that the June increase in its producer price index — which measures inflation pressures before they reach the consumer — followed a 0.5 per cent rise in May. The deceleration reflected a big drop in food costs in June and a much smaller increase in energy prices.

However, wholesale prices over the past 12 months have surged 3.4 per cent. That marks the largest 12-month gain since a 3.7 per cent rise in the 12 months ending November 2011.

The acceleration in wholesale prices is evident in various other price gauges. The government will report on June consumer prices Thursday, but the 12-month increase through May showed a gain of 2.8 per cent. An inflation gauge favoured by the Federal Reserve has finally reached the Fed’s 2 per cent target for annual increases after six years of undershooting it.