Wholesale prices, retail sales rise in June

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Higher energy prices rippled through the economy in June, helping to drive a bigger-than-expected gain in retail sales.

The sharp rise in wholesale prices — as well as "core" prices that exclude food and energy — could fan investors' fears about inflation. Economists viewed the energy cost hikes as temporary and not the beginning of a dangerous bout of spiraling prices, but said consumers likely will remain cautious as the unemployment rates ticks up.

The 1.8 percent jump in the Producer Price Index, which tracks the costs of goods before they reach store shelves, came after wholesale prices rose 0.2 percent in May, the Labor Department reported Tuesday. Last month's increase was double what economists expected.

"We don't expect to see these trends stick, especially with crude oil prices coming down," said Anika Khan, economist at Wells Fargo. "We don't see any inflation or deflation at this point."

Many analysts expect the increase in energy prices will be short-lived and that the weak economy will restrain companies from ratcheting up prices they charge consumers.

Retail sales rose 0.6 percent last month, due mainly to higher gas prices and auto sales, the Commerce Department said Tuesday.

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