WASHINGTON, Aug 14 - U.S. wholesale prices rose only modestly last month as a slowdown in energy price gains and a drop in food costs tempered increases for cars, drugs and other goods, the Labor Department said on Thursday. The Producer Price Index, which measures prices received by farms, factories and refineries, crept up 0.1 percent in July after a 0.5 percent climb a month earlier, the department said. Excluding at-times volatile food and energy prices, the so-called core PPI rose 0.2 percent as the cost of cars, small trucks and pharmaceuticals marched higher.
The report came in close to expectations in financial markets for a rise of 0.1 percent in both the overall and core index. Energy prices rose just 0.3 percent after a steep 3.4 percent gain in June, while food prices slid 0.2 percent, the first decline since September last year. The department said most of the slowdown in prices for finished producer goods last month reflected a slower rate of increase in energy prices. Energy costs soared in June in part over concerns it could take longer than previously anticipated to restart Iraqi crude oil production in the wake of the war. However, last month oil price gains slowed and have recently settled around $30 a barrel. Further back in the production pipeline, prices for intermediate goods rose 0.2 percent, while crude goods prices dropped 2.9 percent.//