Producer-price leap was highest in 3 decades

Kevin G. Hall | McClatchy Newspapers
last updated: February 27, 2008 07:49:32 AM

WASHINGTON — A sharp jump in wholesale inflation and $100-a-barrel oil prices combined Tuesday to heighten fears that inflationary pressures will drive up mortgage rates and deepen problems in a housing sector that's dragging down the economy.

Wholesale inflation as measured by the producer price index jumped 1 percent in January, according to the Labor Department. Overall producer prices rose 7.4 percent over the past 12 months, the fastest clip since 1981.

The rise in producer prices was driven by higher prices for food, energy and medicine and was more than double the 0.4 percent rise that most mainstream economists forecast.