Producer prices in the U.S. increased by much more than expected in the month of July, the Labor Department revealed in a report released on Thursday.

The Labor Department said its producer price index for final demand shot up by 0.9 percent in July after coming in unchanged in June. Economists had expected producer prices to rise by 0.2 percent.

The report also showed a substantial acceleration by the annual rate of producer price growth, which surged to 3.3 percent in July from an upwardly revised 2.4 percent in June.

Economists had expected the annual rate of producer price growth to increase to 2.5 percent from the 2.3 percent originally reported for the previous month.

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