Higher food and energy prices pushed U.S. wholesale prices up sharply last month, though outside of those volatile sectors prices remained well contained, thanks largely to steep drops in the prices of computers and light trucks.

A separate report showed the U.S. foreign trade deficit unexpectedly declined in February, as a lower bill for imported crude oil helped offset a decline in capital-goods exports.

The producer-price index for finished goods rose 1% in March, the U.S. Labor Department said today, versus 1.3% in February. The core PPI, which excludes food and energy, was unchanged.

Economists had forecast an increase of 0.8% in the headline PPI and 0.2% in the core.

In the 12 months through March, wholesale prices rose 3.2%, the fastest pace since August 2006. The core PPI, in contrast, was up just 1.7% from a year ago.
Producer prices for energy increased 3.6% last month compared to February. Gasoline prices swelled 8.7%. Residential natural gas rose 3.3%. Food prices advanced 1.4%.

Meanwhile, the U.S. deficit in international trade of goods and services fell 0.7% to US$58.44 billion in February from January’s revised US$58.88 billion, the U.S. Commerce Department said today. The January trade gap was originally reported as US$59.12 billion.

In February, exports dropped 2.2% from the previous month, while imports fell 1.7%.

Economists had forecast a US$60 billion trade deficit.

Imports fell to US$182.43 billion from US$185.66 billion. Petroleum-related products accounted for the vast majority of the decline at US$12.82 billion, down from US$16.72 billion in January and the lowest in two years.

Deficits with major trading partners were mixed. The U.S. deficit with China was US$18.43 billion, down from January’s US$21.27 billion and the lowest since May 2006. The deficit with Japan rose to US$7.06 billion from US$6.50 billion the month before. The trade gap with the euro area rose to US$5.34 billion from US$4.96 billion.