Producer prices up 0.5 pct from April, 3.1 pct in past year

Associated Press |

WASHINGTON (AP) — U.S. wholesale prices last month posted the biggest 12-month gain since , a sign that the strong economy is beginning to rouse inflation.

The Labor Department said its producer price index— which measures inflation before it reaches consumers— rose 3.1 percent from . The index rose 0.5 percent from April, biggest one-month increase since January. In April, producer prices rose just 0.1 percent.

Energy prices surged 4.6 percent last month from April, the biggest jump in three years.

Core wholesale prices — which excludes the volatile food and energy sectors — rose 0.3 from April and 2.4 percent from .

The Federal Reserve is expected to raise short-term interest rates Wednesday for the second time this year as inflation hits the central bank's annual 2 percent target.

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