US July PPI up 1.2%; core PPI up 0.7%, core posts largest rise since Nov 2006 Tuesday, August 19, 2008 8:39:00 AM WASHINGTON (Thomson Financial) - US inflation at the wholesale level rose at the fastest annual pace in nearly three decades, as core inflation, which strips out food and energy prices, posted the largest annual gain in almost two decades, the Labor Department said on Tuesday. The department's Producer Price Index, which measures inflation pressures before they reach the consumer, rose 1.2 pct in July following a 1.8 pct rise in June. Core inflation rose 0.7 pct for the month, the largest monthly gain since November 2006. That left core inflation up 3.5 pct in the past 12 months, the fastest unadjusted annual pace since 1991. Overall inflation rose 9.8 pct in the past year, the largest annual gain since June 1981. Economists polled by Thomson Reuters IFR Markets had expected overall wholesale inflation to rise 0.4 pct, while core inflation was expected to increase 0.2 pct. The rise in overall wholesale inflation stemmed from a 3.1 pct gain in energy prices and a 0.3 pct gain in food prices. Within the energy sector, natural gas prices rose 8.8 pct, the largest gain since October 2005, while liquefied petroleum gas prices jumped 10.8 pct, the largest gain since December 2005. Home heating oil prices rose 3.7 pct and gasoline prices fell 0.2 pct, the first decline since April. Food price rises were widespread. Beef and veal prices rose 7.4 pct, the largest in five years, while milk prices rose 5.0 pct, the largest gain in a year. Intermediate goods prices rose 2.7 pct, while crude goods prices rose 4.2 pct in July.