By: AP
By: AP

The government says wholesale inflation last month posted the biggest spike in more than 15 years. The surge was largely because of soaring energy prices as hurricanes battered the Gulf Coast.

The Labor Department's Producer Price Index rose 1.9 percent. Prices for gasoline, natural gas and home heating oil all rose sharply with the widespread shutdowns of refineries and other production facilities along the Gulf Coast.

Excluding the volatile food and energy sectors, the core rate rose three-tenths of one percent.

Assessing the longer-term impact on the economy, in a speech in Tokyo last night, Federal Reserve Chairman Alan Greenspan said the rise in energy prices "will undoubtedly be a drag from now on."

Many analysts believe the Fed will continue to raise interest rates in the near-term in an attempt to keep inflation from further spiraling out of control.

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