U.S. wholesale prices took their sharpest drop in three years during September as gasoline prices made a record plunge. Core inflation, however, shot up by triple the rate expected.

The producer-price index for finished goods fell by 1.3% on a seasonally adjusted basis last month, after increasing 0.1% in August, the U.S. Labor Department said Tuesday. The September drop in the PPI was the largest since prices fell 1.4% in April 2003.

The producer-price index for goods excluding food and energy costs increased 0.6% in September. This “core” rate dropped 0.4% in August. The September climb in the core rate was the largest increase since a matching rise in January 2005.

Economists had forecast a 0.7% decline in the overall PPI and a 0.2% climb in the core rate.

In the 12 months ending in September, overall wholesale prices climbed 0.9% on an unadjusted basis. The core rate was up 1.2%.

The report showed producer prices for finished goods in the energy sector decreased 8.4% last month — the sharpest decline since 14% in July 1986. Gasoline fell a record 22.2%. Residential natural gas rose 1.8% and electricity dipped 0.1%. Home heating oil dropped 18.5%. Food prices increased 0.7% in September.

Wholesale prices of passenger cars increased 2.8%, the largest climb since the 3% logged in September 1990. Prices of light trucks climbed 3.5%. Printing-trades machinery was 2.3% higher. Soaps and synthetic detergents advanced 2.1%.

Deeper in the production pipeline, prices eased last month. Prices of raw materials, also known as crude goods, declined 3.4%, after rising 2.2% in August. Intermediate goods prices decreased 1.4%, after climbing 0.4%.

A separate report released today showed that U.S. industrial production fell more than expected last month, logging the largest monthly drop since September of last year.

Industrial production decreased 0.6% in September, slowing down from a flat level in August, the Federal Reserve said. August’s industrial production was originally reported as being down 0.1%.

Last month’s industrial capacity utilization fell 0.6 percentage point to 81.9%. The August utilization rate was revised up 0.1 percentage point to 82.5%. Still, September utilization was above the 1972-2005 average.

Economists had expected industrial production to drop 0.1% and for capacity utilization to fall to 82.2%, according to median estimates from 24 economists surveyed by Dow Jones Newswires.

Manufacturing output, which accounts for about four-fifths of total U.S. industrial production, fell 0.3% and utilities output plummeted 4.4%. Mining output, however, grew 0.7%.