Producer prices rose 0.2 percent in July, double economists’ expectations, providing little good news to calm volatile markets.
The increase was led by higher costs for tobacco, light trucks, and pharmaceuticals, according to a Labor Department report released on Wednesday. Food costs rose 0.6 percent, largely due to an increase in beef and veal prices. Gas prices, on the other hand, fell 2.8 percent.
Core producer prices, seen as a more reliable gauge of inflation since they exclude volatile food and energy prices, rose 0.4 percent, twice as much as economists expected.
The core increase was the largest since January and the index's eighth consecutive monthly gain. In June, core prices rose 0.3 percent.
U.S. stock futures were up before the producer price data was released. Nasdaq futures fell slightly following the release, but the Dow Jones industrial average and S&P 500 stock index remained elevated.
Investors will also be watching closely for signs of inflation on Thursday when the Labor Department releases the Consumer Price Index. The Federal Reserve has called its outlook for inflation over the medium-term “subdued” and pledged to keep its interest rates near zero through mid-2013.