Wholesale inflation dips despite gas-price jump (AP)

Producer-price index rise driven by 8.2 percent surge in pump costs

WASHINGTON - Consumers, battered by surging gasoline prices, cut back spending for clothes, cars and other items in April, raising worries about the already weak economy.

Retail sales fell 0.2 percent in April, the first decline in seven months, the Commerce Department reported Friday. Meanwhile, the Labor Department said that wholesale prices surged by 0.7 percent, led by a third consecutive big rise in gasoline prices.

The weak retail spending and the big rise in gasoline prices were seen as delivering a double whammy to the economy. The worry is that if gasoline prices spike further and the troubles in housing deepen, then consumers could significantly trim spending and the country could move toward a recession.