Shoes, clothes, tires, plastics and other products all cost more at the wholesale level last month, putting pressure on businesses to pass the increases along to customers.
The increases also give ammunition to critics -- including include some Fed officials -- who fear that the Federal Reserve's bold steps to strengthen the economy have started to feed inflation and need to be reined in.
A widely watched measure of wholesale inflation, the core Producer Price Index, rose 0.5 percent last month, the largest monthly increase since October 2008. The entire index, which includes volatile gas and food prices, rose 0.8 percent.
Drug prices rose 1.4 percent, the most in almost three years. Prices rose for products throughout the economy.
Abercrombie & Fitch Co., which sells clothes primarily marketed to teenagers, said it expects to raise prices later this year because of soaring costs for raw materials. The cost of cotton, for example, has doubled in the past year.
Those costs "are the biggest headwind we face," CEO Mike Jeffries told investors Wednesday. "We're comfortable that we can pass some of these increases on to the customer. We're not comfortable with how much."
The maker of Hanes underwear and T-shirts raised prices in February and might do it again this summer.
Food companies such as Kraft Foods and McDonald's have said in recent weeks that they will raise prices, too. The price of corn has doubled in just six months.
Stores are reluctant to pass along the higher costs at a time when customers are already dealing with high unemployment and paychecks that aren't getting much bigger. So far, inflation at the retail level remains tame.
But some economists fear inflation could become troublesome later. New notes released Wednesday show Fed officials last month raised the prospect of scaling back the Fed's $600 billion program to help the economy by buying government bonds.
The bond-buying program is supposed to help by lowering interest rates on bonds, which can drive down interest rates for other types of debt, like mortgages and loans. But flooding the economy with new money can also ignite inflation.
By year's end, consumer prices could be rising at an annual pace of more than 2 percent, says Carl Riccadonna, an economist at Deutsche Bank Securities -- twice as fast as a year ago.