Producer prices jump 1.8 percent in June

WASHINGTON (Reuters) - U.S. producer prices jumped by twice as much as expected in June on a big rise in energy prices, a government report showed on Tuesday.

The Producer Price Index, which measures prices received by farms, factories and refineries, increased by 1.8 percent, the steepest gain since November 2007, the Labor Department said.

Core prices, which strip out volatile food and energy costs, rose a much greater-than-expected 0.5 percent, boosted by car and truck sales.

Analysts polled by Reuters were expecting a 0.9 percent rise in overall producer prices and a 0.1 percent increase in the core PPI.

Energy prices rose by 6.6 percent as gasoline costs surged 18.5 percent. Both were the biggest rises since November 2007.

Light truck prices rose 3.4 percent, the largest gain since November 2006, while passenger car prices increased 2 percent, the steepest rise since September of that year.

Compared with the same period last year, however, producer prices fell 4.6 percent.

(Reporting by Mark Felsenthal; Editing by James Dalgleish)