WASHINGTON, July 17: A big drop in gasoline prices pulled US producer prices down in June but a closely watched measure of core inflation rose at a pace likely to keep concerns about inflation on policy-makers’ minds.

Separately, the Federal Reserve said on Tuesday that output by US factories, mines and utilities increased by 0.5 per cent, bouncing back from a 0.1 per cent May decline partly on a surge in production of new cars and trucks.

Analysts said the production data was a heartening sign that the manufacturing sector was picking up some of the slack from a slump in the housing sector that is casting a pall over other parts of the economy.

Producer prices are a gauge of costs at the wholesale level. The producer price index published by the Labour Department that measures prices paid at the farm gate and factory door fell 0.2 per cent in June after soaring 0.9 per cent in May, the first drop since January.—Reuters