Wholesale prices barreled ahead while housing and industrial activity faltered — a blend of high costs and slow growth that ensures...

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WASHINGTON — Wholesale prices barreled ahead while housing and industrial activity faltered — a blend of high costs and slow growth that ensures the Federal Reserve’s most likely move on interest rates next week will be no move whatsoever.

The Labor Department’s Producer Price Index, which measures the costs of goods before they reach store shelves, leapt 1.4 percent in May, the biggest increase in six months.

Galloping energy and food prices, which are squeezing business profits, figured prominently in the index’s pickup.

The economy’s problems and high prices for fuel and raw materials are taking a toll on manufacturers and others.

The Federal Reserve reported Tuesday that industrial production fell 0.2 percent in May, the second straight monthly decline.

The number of new housing projects started in May fell 3.3 percent to a 975,000 pace — the lowest in 17 years — as builders pulled back further, the Commerce Department reported Tuesday.

Builders are smarting as unsold homes as well as foreclosed homes pile up, adding to an already swollen supply. Sagging demand and rising mortgage rates are adding to builder headaches.

“Builders are doing exactly the right thing — cutting back,” said David Seiders, chief economist at the National Association of Home Builders. “Now I’m a little more worried on the interest-rate front. I think we’ll see mortgage rates recede to some degree. If not, it will be a tougher road for housing than anticipated,” Seiders said.

The housing slump has been the biggest drag on the economy, which has slowed sharply in recent months.

Fed Chairman Ben Bernanke and his colleagues have made it clear they’re not inclined to cut rates further for fear of aggravating inflation. On the other hand, boosting rates too soon to fend off inflation would hurt an economy battered by housing, credit and financial woes.

“The Fed is in a box,” Ken Mayland, president of ClearView Economics, said after the latest batch of economic barometers was released Tuesday.

That’s why many economists predict the Fed will hold rates steady at 2 percent, a four-year low, at the session next Tuesday and Wednesday.

Soaring energy and food prices, which have racked up a string of record highs in recent days, are walloping consumers and businesses alike. Energy prices eased a bit Tuesday, with oil hovering around $134.01 a barrel and gas prices nationally at $4.078 a gallon.

Last week, the government reported consumer prices had surged 0.6 percent in May, the biggest increase in six months. Those higher prices are cutting into workers’ paychecks — further straining household budgets.

Wholesale prices are rising faster than consumer prices because businesses — for competitive or other reasons — have been limited in their ability to pass along to consumers all of their higher costs, from energy and other raw materials.

The Fed is hoping such restraint will continue.

“For now, the Fed seems content to talk tough” against inflation, said Stephen Stanley chief economist at RBS Greenwich Capital. “This strategy is risky.”