Prices Up 1.2% In July: Grain and Fuel Give Wholesale Index a Boost...
Wholesale prices soared last month, fed mostly by a sharp increase in grain prices but also by a rise in fuel costs, the Department of Labor reported yesterday.</br></br>The 1.2 per cent increase in wholesale prices, which are a precursor of what consumers eventually pay, further feeds worries that inflation, which had slowed substantially during the recession, might be rekindled during the early stages of the recovery.</br></br>The wholesale price index jumped 1.2 per cent in July, mainly' because of a 6.6 per cent increase in the price of farm products and a 3.3 per cent rise in processed foods and feeds. Industrial prices rose 0.4 per cent for the second month in a row.</br></br>The farm price rise was triggered by rumors of another large purchase of grain by the Soviet Union, which bought 19 million tons from the United States in 1972 and sent the price of wheat and other grains soaring.</br></br>Last month grain prices rose 10.7 per cent. A Labor Department analyst said most of the grain price rise occurred before the July 16 announcement that the Soviet Union would purchase 9.8 million tons of wheat and corn.