WASHINGTON — Wholesale prices barreled ahead while housing and industrial activity faltered — a blend of high-costs and slow growth that makes the Federal Reserve's most likely move on interest rates next week to be no move whatsoever.

Chairman Ben Bernanke and his colleagues have made it increasingly clear they're not inclined to cut interest rates further for fear of aggravating inflation. On the other hand, boosting rates too soon to fend off inflation would hurt an economy already battered by housing, credit and financial woes.

"The Fed is in a box," Ken Mayland, president of ClearView Economics, said after the latest batch of economic barometers were released yesterday. That's why many economists are predicting the Fed will hold rates steady at 2 percent, a four-year low, at its June 24-25 session.

The Labor Department's Producer Price Index, which measures the costs of goods before they reach store shelves, leaped 1.4 percent in May, the biggest increase in six months. Galloping energy and food prices figured prominently in the rise.

The economy's problems and high prices for fuel and raw materials are taking a toll on manufacturers and others.

The Federal Reserve reported that industrial production fell 0.2 percent in May, the second straight monthly decline. Plants operated at only 79.4 percent of capacity, the lowest since September 2005, after the Gulf Coast hurricanes.

And there was more fallout from a deeply depressed housing market. The number of new housing projects started in May fell 3.3 percent to a 975,000 pace — the lowest in 17 years — as builders pulled back further. Unsold homes as well as foreclosed homes are piling up, adding to the already swollen supply. Sagging demand from would-be buyers and rising mortgage rates are adding to builder headaches.

"Builders are doing exactly the right thing — cutting back," said David Seiders, chief economist at the National Association of Home Builders. "Now I'm a little more worried on the interest rate front. I think we'll see mortgage rates recede to some degree. If not, it will be a tougher road for housing than anticipated."

The Fed and the Bush administration are hoping that the central bank's powerful rate cuts since last September — which take months to work through the economy — along with the government's $168 billion stimulus effort — will help lift the country out of its doldrums. It's a gamble, though, as expensive food and gas could prompt people and businesses to hunker down even further.