U.S. wholesale prices grew in March at their fastest pace in three months, but the core index slowed. The producer price index for finished goods rose 0.5% on a seasonally adjusted basis last month after an unrevised 1.4% decline in February, the U.S. Labor Department said today.

Excluding food and energy costs, the core producer price index increased 0.1% in March, its slowest advance since November. February’s core increase was unrevised at 0.3%.

For the 12 months ended in March, overall wholesale prices climbed 3.5% on an unadjusted basis, marking the slowest 12-month increase since September 2004.

With oil prices picking up in March, Wall Street economists had expected the overall PPI to rise 0.4% during the month and the core PPI to rise 0.2%.

Overall price pressures eased despite the increase for finished goods. Raw materials prices dropped 2.7% in March. Partially processed goods prices decreased 0.1% last month. Prices for finished goods in the energy sector climbed 1.8% last month, after a 4.7% decline the month before.

Wholesale gasoline prices last month rose 9.1%, their fastest advance since November 2004. Residential natural gas prices were down 0.5%. And residential electric power prices fell 0.7%, their sharpest decline since June 2004.

Food prices grew 0.5% last month. Wholesale prices of passenger cars rose 0.4% in March. Light motor trucks, which include sport utility vehicles, rose 0.1%. Wholesale tobacco and alcohol prices were each down 0.1% in March.

Separately, U.S. home construction fell for the fourth time in six months in another sign builders are pulling back.

Housing starts decreased 7.8% a second straight month, dropping to a seasonally adjusted 1.960 million annual rate — the lowest rate since March 2005’s 1.833 million, the U.S. Commerce Department said Tuesday.

February starts were originally seen down 7.9%. Starts jumped by 16% in January, slipped 6.9% in December, rose 4.1% in November and dropped 5% in October.

March building permits also dropped the fourth time in six months.