August 14, 2012 9:30 AM, EDT

Producer Price Index Rises 0.3%

Prices paid to U.S. producers rose in July, reflecting an increase in automobile, cigarette and pharmaceutical costs, the Labor Department said Tuesday.

The producer price index rose 0.3%, following a 0.1% increase in June.

Economists had forecast a 0.2% increase of the overall PPI rate, Bloomberg reported.

The so-called core PPI excluding food and energy rose 0.4%, Labor said.

The core rate was projected to rise 0.2%, Bloomberg reported.

An increase in the PPI could indicate strong demand for goods, which would mean more shipments for trucking companies. However, if inflation begins to accelerate too quickly, it could also hurt the economy