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NEW YORK (CNNMoney.com) -- Wholesale prices saw their biggest jump in 34 years in November, according to a government inflation reading Thursday that came in much higher than forecast due to a record spike in energy prices.

The Producer Price Index rose 3.2 percent, up from only a 0.1 percent rise in October. Economists surveyed by Briefing.com had forecast a 1.5 percent increase.

It was the biggest jump in that price measure since August 1973. The key driver in November -- a record 14.1 percent rise in energy prices. The previous record one-month jump in energy prices was in January 1990, on the eve of the first Gulf War.

Gasoline prices were up 15.1 percent in November, but that is a very volatile number. Gas prices were up 17.4 percent in February and down 14.8 percent in August, for example.

Food prices, which had been another source of inflationary pressures recently, were unchanged in the latest month.

But the even more closely watched core PPI, which strips out volatile food and energy prices, also rose much more than expected, jumping 0.4 percent after being unchanged in October. Economists had forecast only a 0.2 percent rise in that reading.

Still the 12-month change in the core PPI actually came down to a 2.0 percent rise, from a 2.5 percent rise in the October reading. The Federal Reserve is generally believed to want to see core inflation readings in the range of 1 to 2 percent.

The Fed uses interest rates in an effort to keep prices stable, and the threat of inflation is one of the factors that stopped the central bank from cutting rates more than the quarter percentage point cut announced Tuesday afternoon. Stocks plunged on that action as investors who had been hoping for a half-point cut were disappointed. And the hotter than expected PPI number led to further declines on Wall Street Thursday.

"The core is worse than expected, but on a year over year basis, its in the comfort zone, even if it's at the top of the comfort zone," said Wachovia economist Sam Bullard. He said he believes that the PPI is likely to show a decline in the December reading due to a retreat in gasoline prices so far this month.

The inflation reading comes the day before the government's key inflation reading on the retail level, the Consumer Price Index, or CPI. That report, which is less volatile than the PPI, is forecast to show a 0.6 percent in the overall CPI, and a 0.2 percent rise in core CPI.