U.S. wholesale prices were stable in June despite a rebound in energy prices, providing fresh evidence that inflation risks have subsided.

The U.S. Labor Department said the producer-price index for finished goods was unchanged last month as falling prices of food and capital equipment offset energy-price gains.

Energy prices rose 2% as crude-oil prices rebounded to record highs.

The so-called core index, which excludes food and energy items, fell for the first time in four months, dropping 0.1%. In annual terms, producer prices were 3.6% higher than a year ago.

The report was the second this week to show that inflation remains under control despite a steep run-up in crude-oil prices. Thursday, the government reported that consumer prices also were steady in June.

Separately, U.S. industrial production surged in June, posting its biggest increase in more than a year, as warmer-than-usual weather boosted utilities output, the U.S. Federal Reserve said today.

Industrial production rose 0.9%, the biggest jump since February 2004, after rising a revised 0.3% in May. Capacity utilization rose 0.6 percentage point in June to a level of 80.0% from 79.4% in May.

More than half of the 0.9% increase in industrial output in June was due to the 5.3% jump in the output of utilities, which was the result of warmer-than-usual temperatures, the Fed said.

In June, manufacturing production rose 0.4% after rising a revised 0.5% in May, first reported up 0.6%. June manufacturing capacity use came in at 78.4%, up from 78.2% in May.

Meanwhile, the U.S. Commerce Department said business inventories rose 0.1% to a seasonally adjusted US$1.300 trillion in May after advancing a revised 0.2% in April. Business sales declined 0.1% to $997.83 billion, after climbing an unrevised 1.2% the previous month.

Also today, manufacturing activity in the New York Federal Reserve district recorded a sharp further rise in July, with the overall index increasing to a reading of 23.91 compared to a downward-revised 10.49 in June. The index had temporarily dipped into negative territory in May, the first such reading after 25 months of positive readings.