NEW YORK (CNN/Money) - Wholesale prices rose at a faster pace than expected in April, even as the pace of energy price hikes slowed from the previous month, the government reported Tuesday.

The Producer Price Index, which measures prices that businesses charge one another for goods, was up 0.6 percent in April, compared with a 0.7 percent rise in March, when rising energy costs sparked higher prices. Economists surveyed by Briefing.com had forecast a rise of 0.4 percent.

The so-called core PPI, which strips out often-volatile food and energy prices, rose 0.3 percent, compared with a 0.1 percent rise in March. Economists had forecast a 0.2 percent rise in April, according to Briefing.com.

The core PPI is the more closely watched number in the report, and the rise was the greatest since a revised 0.7 percent increase in January.

Investors are concerned about any signs of increased inflationary pressures, which could prompt the Federal Reserve to raise interest rates higher than they now expect.

The core number initially sent Treasury prices lower, and the yield on the 10-year note, which moves in the opposite direction, higher. But they both soon returned to their pre-report levels.

Mark Vitner, senior economist at Wachovia Securities, said a look behind the headline numbers shows that price increases for intermediate goods and crude goods are slowing, suggesting that the finished goods prices measured by the most-watched part of the report are likely to moderate in the coming months.

"This may be the last bad PPI report we'll see for quite some time," Vitner said. "This might be the height of this particular inflation scare."

While oil futures have retreated since reaching record levels in March, the price of finished energy products increased 2.1 percent in April. But that was slower than the 3.3 percent rise in March.

The report comes ahead of Wednesday's Consumer Price Index report, which measures retail prices. Briefing.com's survey shows economists looking for a 0.4 percent rise in the overall CPI in April following a 0.6 percent increase in March, while the core CPI is expected to be up 0.2 percent in April after a 0.4 percent increase the previous month.

Vitner said that the PPI, which is generally more volatile than the CPI, does not help predict what's ahead for the more closely watched retail price measure. But the PPI has generally been higher than CPI for a number of months, particularly since much of the increase in CPI is in the cost of services not measured by PPI.

"It suggests there could be a profit squeeze in some of the cyclical industries," said Vitner. "Autos. Household appliances. Anything that has a lot of raw commodity in it. The end user is going to have a hard time passing those costs on to the consumers."