Wholesale price inflation increased to an annual rate of 5.7 percent in July, spurred by big boosts over a wide variety of products, including clothing, automobiles, furniture and poultry, the Labor Department said Friday.
The increase came despite lower prices for beef, as the drought prompted farmers to slaughter more animals because of burned-out pastures and higher feed prices.Just three days after the Federal Reserve Board initiated an increase in interest rates to fight inflation, the Labor Department said wholesale prices rose 0.5 percent in July, the same monthly increases as in May and March.
In June, the department's Producer Price Index for finished goods rose 0.4 percent, or at an annual rate of 4.6 percent, more than double the 2.2 percent rate of wholesale price inflation for all of 1987.
Wholesale prices for consumer foods increased at a slower pace in July - 0.4 percent - than for goods overall, indicating to some analysts that the worst immediate effects of the drought plaguing the farm belt were over. Food prices had been rising faster than prices for other products on the wholesale level since April.
Overall energy prices, meanwhile, remained unchanged after a 1.6 percent drop in June, with a 3 percent seasonally adjusted increase in gasoline prices offsetting a 6.1 percent decline in what distributors pay for home heating oil.
Excluding food and energy, wholesale prices rose at 0.6 percent in July.
The Commerce Department said in a separate report Friday that the stockpile of inventories in the nation's warehouses swelled 0.7 percent in June, mirroring the May increase, which could indicate a coming manufacturing slowdown.
Manufacturers' inventories, adjusted for seasonal variations but not for price changes, were estimated at $733.9 billion at the end of June, 0.7 percent above May and 7.8 percent above last June, the Commerce Department said. The increase follows a 0.7 percent increase in May, the department's revised statistics show.
Price changes on the retail level usually lag one to three months behind those at wholesale. Consumer price inflation has been averaging 4.4 percent for the past 18 months. July figures on consumer prices are to be published Aug. 23.