WASHINGTON — U.S. wholesale prices rose sharply in May, pushing the annual inflation rate at the producer level to its highest since late 2022, the Labor Department reported.
The Producer Price Index for final demand increased 1.1 percent in May after a similarly revised gain in April, according to data released on June 11 by the Bureau of Labor Statistics. Over the 12 months through May, the index advanced 6.5 percent, the largest such rise since November 2022.
Prices for final demand goods jumped 2.8 percent in May, led by a surge in energy costs. Gasoline prices soared 23.4 percent, with additional increases recorded for diesel fuel, jet fuel, plastic resins, industrial chemicals and natural gas liquids. Food prices rose 0.6 percent.
Services prices increased more modestly, climbing 0.3 percent. A 4.8 percent rise in portfolio management fees, tied to equity market gains, contributed significantly to the services advance.
The report comes amid ongoing geopolitical tensions in the Middle East that have affected energy markets. Economists had expected a monthly increase of about 0.7 percent and an annual rate of 6.4 percent.
Excluding volatile food and energy components, the core PPI rose 0.4 percent in May, with the annual core rate at 4.9 percent.
The PPI measures average changes in prices received by domestic producers for their output. It serves as an indicator of potential future pressure on consumer prices, though the relationship is not direct.
"Producer prices increased more than expected in May, leading to the largest annual gain in 3-1/2 years as the Middle East conflict boosted the cost of energy products," a Reuters analysis noted, reflecting broader reporting on the data.
The acceleration marks the fourth consecutive month of rising annual wholesale inflation. April's annual rate was revised to 5.7 percent.
Details on specific industry impacts and forward-looking business expectations were not immediately detailed in the initial release. The next PPI report, covering June data, is scheduled for July 15.
The Bureau of Labor Statistics attributed the May figures to seasonally adjusted calculations based on surveys of producer prices. Final demand prices advanced 6.5 percent unadjusted over the year.
This development occurs as policymakers and markets monitor broader inflation trends. No further official comment from administration officials was available at the time of the report's release.
