US inflation rates rising at a 27-year-high pace

Wholesale inflation surged in July, leaving prices for the past year rising at the fastest pace in 27 years, according to government data released Tuesday. The Labor Department reported that wholesale prices shot up 1.2 per cent in July, pushed higher by rising costs for energy, motor vehicles and other products. The increase was more than twice the 0.5 per cent gain that economists expected.

Core prices, which exclude food and energy, rose 0.7 per cent. That increase was the biggest since November 2006 and more than triple the 0.2 per cent rise in core prices that had been expected. In other economic news, the Commerce Department reported that housing construction fell in July to the lowest pace in more than 17 years.