U.S. wholesale inflation advanced sharply again in May, driven by fuel costs tied to the ongoing Iran war conflict as the Producer Price Index (PPI) posted its fourth straight increase and highest annual rise since November 2022, according to data released June 11 by the Bureau of Labor Statistics.
The PPI for final demand increased 1.1% in May month-over-month on a seasonally adjusted basis — well above consensus forecasts of 0.7% to match April’s downwardly revised mark. On a year-over-year basis, headline PPI surged 6.5%, up from a downwardly revised 5.7% (from 6.0%) in April.
Energy Continues to Drive Consumer Inflation in May Alongside Core Uptick – June 10
U.S. Wholesale Sales Post More Strong Growth in April, Inventories Slow – June 9
Core PPI — which excludes volatile food and energy prices — rose 0.4% month-over-month in May after a downwardly revised 0.7% (from 1.0%) advance in April and trailed market expectations of 0.5%. On annual basis, May’s core wholesale inflation increased 4.9% to match April’s downwardly revised (from 5.2%) mark.
Nearly 80% of the May’s overall monthly PPI is attributable to a 2.8% increase in the index for final demand goods — the largest increase since since data were first collected in December 2009. And within that, the Bureau said 80% of the broad-based advance can be traced to a 10.7% jump in prices for final demand energy. Over half of the May advance in prices for final demand goods is attributable to a 23.4% spike in the index for gasoline.
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