Wholesale inflation accelerated in May as rising energy prices pushed producer costs to their highest annual increase in more than three years, according to newly released data from the U.S. Bureau of Labor Statistics.
The Producer Price Index (PPI) for final demand advanced 1.1% in May after posting identical gains in April. Compared with the same month last year, producer prices were 6.5% higher, representing the strongest annual increase since November 2022.
Goods prices were the primary driver of the monthly increase. The index for final demand goods climbed 2.8%, the largest monthly rise since the current data series began in 2009. Energy prices surged 10.7% during the month and accounted for most of the overall increase.
Fuel markets recorded some of the sharpest gains. Gasoline prices jumped 23.4%, while diesel fuel, jet fuel, industrial chemicals and plastic materials also moved higher. A limited number of products posted declines, including pork and residential electricity.
Service-sector inflation remained comparatively moderate. Prices for final demand services increased 0.3%, supported by gains in transportation, warehousing and investment-related activities. Portfolio management costs rose 4.8%, contributing significantly to the monthly advance.
Underlying inflation pressures also strengthened. Excluding food, energy and trade services, producer prices increased 0.8% in May, the largest monthly gain for that measure since March 2022. The index was up 5.1% from a year earlier.
The latest figures indicate that price pressures remain widespread across the U.S. economy, with energy markets continuing to play a central role in shaping costs faced by producers and businesses.
Source: U.S. Bureau of Labor Statistics
Link: https://www.bls.gov/news.release/pdf/ppi.pdf
