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Producer prices rise more than expected

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U.S. producer prices jumped in February as a result of higher costs for energy, cigarettes and toys, reported Bloomberg News. According to the Labor Department, prices paid to U.S. producers rose 1.3 percent after a 0.6 percent decline in January. Core prices, which exclude fuel and food, rose 0.4 percent.

The results are at least double analysts’ average estimate of a 0.5 percent rise in producer prices and a 0.2 percent rise in core prices. The results of the producer price index, one of three monthly inflation gauges the federal government reports, show that inflationary pressures remain strong.

Higher energy costs contributed to the rise with a 3.5 percent increase last month after decreasing 4.6 percent in January. Gasoline prices rose 5.3 percent. The price of cigarettes also increased 4.6 percent in February, and toys and games rose 2.3 percent, the biggest increase since February 1983. Raw material costs soared 8.9 percent after a 6.3 percent decline in January.