U.S. wholesale prices rose 1.1% in May, pushing the annual producer price index to 6.5% — the largest 12-month increase since November 2022, the Bureau of Labor Statistics reported Thursday.
Energy prices drove the bulk of the gain, with gasoline surging 23.4% and final demand goods posting their largest monthly increase on record
Brandon Bell / Getty Images
U.S. wholesale prices rose 1.1% in May, pushing the annual producer price index to 6.5% — the largest 12-month increase since November 2022, the Bureau of Labor Statistics reported Thursday.
Both figures came in above what analysts had anticipated — CNBC noted that Dow Jones consensus called for a 0.7% monthly rise — and the result repeated April's revised 1.1% pace. Economists surveyed by FactSet had projected a 0.6% monthly gain and a 6.4% annual rate.
Goods prices for final demand were the dominant driver, posting a 2.8% monthly jump that the BLS said was the steepest since the series launched in December 2009 — accounting for close to four-fifths of the overall PPI gain. Within goods, energy was the chief culprit, advancing 10.7%; a 23.4% wholesale surge in gasoline alone was responsible for more than half of the goods-category increase. Diesel, jet fuel, plastic resins, industrial chemicals, and related petroleum-based products also registered gains.
Final demand services prices rose 0.3% in May. Portfolio management fees, which climbed 4.8% during a strong month for equities, were the largest single contributor on the services side. Truck transportation of freight and securities brokerage services also increased.
When food and energy are removed, core PPI advanced 0.4% for the month. A broader measure that also strips out trade services came in at 0.8% — a reading not exceeded since March 2022 — and its year-over-year rate climbed to 5.1%, a level last seen in October 2022.
Food at the wholesale level picked up speed in May, with a 0.6% monthly rise that dwarfed the 0.2% recorded in April, according to Barron's. Pork prices fell 10.1%, while residential electric power and sanitary paper products also declined.
Further along the supply chain, prices for processed goods used in intermediate demand rose 3.5% in May, and prices for unprocessed goods for intermediate demand advanced 4.9%. On a 12-month basis, unprocessed goods for intermediate demand were up 22.2%, the largest annual gain since September 2022.
Thursday's wholesale inflation data followed Wednesday's BLS consumer price report, which showed a 4.2% annual CPI rate for May, with Iran-war-related energy costs cited as the primary upward force.
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