US producer prices surge in January

| February 17, 2011 | 0 Comments

The Labor Department has announced US producer prices surged in January - the biggest rise for two years, driven higher by rising drug costs.

According to the data, the core producer price index, which strips out food and energy costs, increased by 0.5%, the biggest rise since October 2008.

It exceeded analysts expectations of a 0.2% gain.

The figures will raise the possibility of the US Federal Reserve lifting interest rates as rising producer prices could fuel inflationary pressures.

Several other central banks are battling with stubbornly high inflation, which is being driven by rising food and commodity prices.

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