Wholesale inflation remained elevated in May as higher energy costs pushed producer prices to their fastest annual pace in more than three years, according to data released by the U.S. Bureau of Labor Statistics.
The Producer Price Index (PPI) for final demand increased 1.1% in May on a seasonally adjusted basis, matching April’s gain. Compared with a year earlier, producer prices rose 6.5%, marking the largest 12-month increase since November 2022.
A sharp rise in goods prices accounted for most of the monthly advance. The index for final demand goods climbed 2.8%, the strongest increase since the current series began in 2009. Energy costs were the primary driver, with the energy index surging 10.7% during the month.
Gasoline prices recorded one of the largest increases, jumping 23.4% from April. Higher prices were also reported for diesel fuel, jet fuel, industrial chemicals and plastic materials. Meanwhile, pork prices declined 10.1%, while residential electricity prices moved lower.
Service-sector inflation remained comparatively moderate. Prices for final demand services rose 0.3% in May after increasing 0.7% in April. Growth in transportation, warehousing and investment-related services helped lift the index, while trade margins declined.
Underlying inflation pressures also strengthened. Excluding food, energy and trade services, producer prices advanced 0.8% in May and were 5.1% higher than a year earlier. Both figures represented the strongest gains for that measure since 2022.
The report also showed continued cost increases further up the production chain. Prices for processed goods rose 3.5%, while unprocessed goods increased 4.9%, led largely by higher petroleum-related costs.
The latest figures suggest that energy markets remain a key factor influencing inflation trends across the U.S. economy.
Source: U.S. Bureau of Labor Statistics.
Link: https://www.bls.gov/news.release/ppi.htm
