The US producer prices rose more than expected in May, accounting for the largest annual increase in nearly six and a half years. This shows data from the US Department of Labor. The Producer Price Index (PPI) for final demand has risen by 0.5% in the past month, driven upwards by the higher gasoline prices and the continued rise in prices in the services sector. In April, the PPI rose by 0.1%.
For the 12 months to May, the index increased by 3.1%, which the highest growth since January 2012. In April, the annual price increase was 2.6%.
According to economists, the expectations were for growth of 0.3% on a monthly basis and 2.8% on annual.
The Main Producer Price Index, excluding food, energy and commerce services, rose by 0.1% last month. The increase was similar in April. For the 12 months to May, the base index grew by 2.6% after rising by 2.5% in April.
The new boom in production prices strengthens expectations that the inflation will pick up momentum this year and will likely pass the 2% margin set by the Federal Reserve.
In May, commodity prices rose by 1%, accounting for a total of 60% of the PPI increase. In the previous month, their value remained unchanged. In May, however, their growth was driven to a large extent by the 9.8% increase in gasoline.
The gross commodity prices also climbed slightly upward by 0.1% in May, after declining by 1.1% in April.
There was also a rise in the price of services by 0.3% in May – slightly more than 0.1% in April.