Producer prices in the US rose to their highest annual rate since October 1981 in January.
Prices rose 7.4% from January 2007, while they were up 1.0% from December 2007, the Labor Department said.
Monthly core producer prices, which exclude food and energy costs, rose by a greater-than-expected 0.4%.
Producer prices, sometime known as factory gate inflation, show the amount domestic producers receive for their products.
Inflationary pressures tend to show up earlier in producer prices than in consumer or retail prices figures.
Interest rates
Growing inflation is a problem for the Federal Reserve's interest rate setters, who are aggressively cutting the cost of borrowing to prevent a recession.
If inflation gets too high, they will be unable to cut rates further.
"It is a bit troubling, because this release indicates clear pipeline inflation pressures," said Matthew Moore from Banc of America Securities in New York.
"That could limit the Fed easing to counteract the credit tightening."
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