first_imgWASHINGTON – 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.The central bank in June boosted its key interest rate for a second time this year and signalled that it expected to raise rates a total of four times in 2018. While overall prices have finally begun to rise, wage gains so far have remained modest. But economists believe with unemployment at a low 4 per cent, wage increases should begin to accelerate.The Fed is expected to keep boosting its benchmark interest rate at a moderate pace unless it sees signs that inflation and wage gains are starting to rise too quickly, a development that would prompt faster Fed rate hikes to keep the economy from overheating.For June, core inflation at the wholesale level was up 0.3 per cent and 2.8 per cent over the past year.Energy costs rose 0.8 per cent in June on top of a much more rapid 4.8 per cent surge in May. Food costs, however, fell by 1.1 per cent, led by a 13.8 per cent drop in the price of vegetables.last_img

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