US wholesale prices surged by a more than expected 1.2% in July as inflationary pressures continue to hit the world's largest economy. Separate figures also showed continued weakness in the country's housing sector.
Most economists had expected the US Labor Department's producer price index (PPI), a key gauge of inflation at the wholesale level, to rise by only 0.4% last month.
The core rate, which strips out volatile energy and food costs, increased by a more than anticipated 0.7% in the month to July. Economists had predicted a core rate increase of 0.2%. In the year to July, headline PPI rose a hefty 9.8%.
Separate figures showed that the construction of new homes in the US plunged 11% in July to an annualised pace of 965,000 units, after an unexpected increase in June.
The figure from the Commerce Department was slightly higher than analysts had expected, but the rate of new building was the weakest since March 1991, and the decline was the sharpest since December 2007.
Construction permits - an indicator of future housing activity - dived 17.7% to 937,000, far below the 959,000 analysts expected. The drop was the steepest since February 1990.
