WASHINGTON, March 14 Reuters U.S. producer prices increased more than expected in February amid a surge in the cost of goods like gasoline and food, which could fan fears that inflation was picking up again.

The producer price index for final demand rose 0.6 last month after advancing by an unrevised 0.3 in January, the Labor Department39;s Bureau of Labor Statistics said on Thursday. Economists polled by Reuters had forecast the PPI climbing 0.3.

A 1.2 jump in the prices of goods accounted for nearly twothirds of the increase in the PPI. Goods prices were driven by energy products, which surged 4.4 after declining 1.1 in January. Goods prices had edged down 0.1 in January.

In the 12 months through February, the PPI shot up 1.6 after advancing 1.0 in January.

Government data on Tuesday showed consumer prices increasing strongly for a second straight month in February. But economists largely shrugged off the rise, arguing that difficulties adjusting the data for price increases at the start of the year continued to exert an upward bias on inflation.

Wholesale gasoline prices rose 6.8 last month. There were also increases in the prices of diesel and jet fuel. But prices for hay, hayseeds, and oilseeds fell as did those for iron and steel scrap and asphalt. Food prices rose 1.0, amid increases in the costs of eggs and beef.

Excluding food and energy, goods prices rose 0.3, matching January39;s gain. This suggests that goods deflation, the major driver of lower…