Tuesday, the Labor Department forwarded a rise of 1.7% in U. S. producer prices in August, fully backed by the biggest gain in energy prices since November 2007. However, if volatile energy and food prices are excluded, then the gain in producer-price index comes to 0.2%.

The data has appeared in the midst of fears that the inflation might crawl into the U. S. economy. A fall by 0.9% was seen in overall producers' prices in July, while the core rate plummeted 0.1%.

John Ryding and Conrad DeQuadros of RDQ Economics wrote in an email Tuesday morning, "We are concerned about the outlook for inflation later in 2010 and this report suggests that inflation pressures may be beginning to stir in manufacturing."

The maximum gain was experienced by energy prices in August report. A hike in prices for gasoline, heating oil, diesel fuel and liquefied petroleum was seen; and while prices for gasoline spiked 23%, the most since April 1999, the heating-oil prices shot up 21.3%, their biggest increase since November 2007. Furthermore, August was also the month when fodd prices rose 0.4%.

MarketWatch conducted a survey with a few economists, which showed that they were predicting producer prices to ascend 1.5% in August, while they estimated the core prices to go up by 0.1%.

"U. S. stocks opened lower Tuesday after the producer prices data and a separate report from the Commerce Department that showed retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years," specified the report by Labor Ministry.

In the past year, producer prices fell 4.3%; while core prices rose 2.3%.