U.S. wholesale price growth slowed in February on falling food prices, but accelerated in consumer products, automobiles and prescription drugs, signaling that inflation risks remain in the U.S. economy.

Meanwhile, U.S. home construction dipped in February, reflecting a sharp drop in the Northeast, while permits for future groundbreakings plunged to the lowest level in 16 years.

The producer price index for finished goods rose 0.3% on a seasonally adjusted basis in February after a 1% increase the previous month, the U.S. Labour Department said today.

The core index, which excludes food and energy items, rose 0.5% in February, its highest monthly increase since November 2006.

Wall Street expected a 0.3% increase in the overall PPI and 0.2% core rise.

Meanwhile, housing starts decreased 0.6% in February to a seasonally adjusted 1.065 million annual rate, after rising 7.1% in January to 1.071 million, the U.S. Commerce Department said today..

Economists had February starts down by 0.2% to a 1.010 million annual rate from the originally reported January level of 1.012 million.