U.S. February Producer Prices Rise 0.4%; Core Rate Up 0.1%

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March 22 (Bloomberg) -- U.S. wholesale prices accelerated for a second month in February, led by higher costs for gasoline and food, a government report showed.

The 0.4 percent increase in the measure of prices paid to factories, farmers and other producers followed a 0.3 percent rise in January, the Labor Department said today in Washington. The core rate, which excludes food and energy, rose 0.1 percent after a 0.8 percent increase.

Core prices rose 2.8 percent from February of last year, the biggest 12-month rise since November 1995, suggesting producers are having more success in passing on higher costs and underscoring forecasts Federal Reserve policy makers will raise interest rates later today to help contain inflation.

``Goods price inflation is still accelerating, but it's not as out of control as it looked in January,'' said Robert Mellman, an economist at J.P. Morgan Securities Inc. in New York, before the report. ``There is a lot of cost pressure, domestic demand is stronger and we have a weak dollar, and that makes it easier for companies to pass on price increases. These inflation pressures are a concern for the Fed.''

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