11/14/2017 03:54 EST | Updated 11/14/2017 04:00 EST

US producer prices rise 0.4 in October on higher food prices

WASHINGTON — Prices at the wholesale level climbed 0.4 per cent in October and 2.8 per cent over the past year, biggest annual jump in more than five years and a sign that an improving economy may finally be reviving inflationary pressures.

The Labor Department says last month's increase in the producer price index, which measures inflation pressures before they reach the consumer, matched the 0.4 per cent rise in September. The uptick from October 2016 was the biggest since February 2012. The 12-month increase was driven by a 7.6 per cent jump in energy prices.

But energy prices were unchanged from September to October. Food prices rose 0.5 per cent in October, most since June. Excluding the volatile food and energy sectors, wholesale prices rose 0.3 in October from September.

Producer prices rose faster than economists had expected in October. Since the Great Recession, inflation has come in consistently below the Federal Reserve's 2 per cent annual target. But many economists expect price pressures to rise as the economy improves. Economic growth has come in at or better than a healthy 3 per cent annual rate in each of the last two quarters; and unemployment has fallen to 4.1 per cent, the lowest level in almost 17 years.