http://www.nytimes.com/aponline/us/AP-Economy.html?hp

Producer Prices Soar in January

By THE ASSOCIATED PRESS
Published: February 26, 2008

Filed at 8:45 a.m. ET

WASHINGTON (AP) -- Inflation at the wholesale level soared in January
by the fastest pace in 16 years, pushed higher by rising costs for
food, energy and medicine.

The Labor Department said Tuesday that wholesale prices rose 1 percent
last month, more than double the 0.4 percent increase that economists
had been expecting.

The worse-than-expected performance was certain to capture attention
at the Federal Reserve, which has chosen to combat a threatened
recession by aggressively cutting interest rates in the belief that
weaker economic growth will keep a lid on prices.

But the combination of rising inflation and weaker growth raises the
threat of ''stagflation,'' the economic malady that plagued the
country through the 1970s, when a series of oil shocks left households
battered by the twin problems of stagnant growth and rising prices.