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Wholesale Index Up In July

Prices charged by producers, such as factories and food-processing plants, rose a moderate 0.2 percent in July, propelled in part by a drought-induced jump in vegetable prices.

Prescription drug costs surged for the third consecutive month, but the Labor Department said "sampling variability" may be affecting the statistic.

Though modest, the overall seasonally adjusted increase in the department's Producer Price Index for finished goods, reported Friday, was more than analysts were expecting.

Nevertheless, it followed a 0.1 percent decline in June and, for the first seven months of the year, the index fell at a 0.3 percent annual rate.

Deflation in goods prices, stemming in part from the falling cost of imports from economically troubled Asia, is helping to keep a lid on inflation. Service costs, not measured in Friday's report, are rising faster, reflecting labor shortages.