By Matt Grossman
Prices charged by American producers continued to charge higher in May, the Labor Department said Thursday, marking another month of elevated wholesale inflation.
The producer-price index rose by 1.1% last month, following an equal increase in April. Analysts polled by The Wall Street Journal were expecting a 0.7% increase.
Over the past 12 months, the PPI is up by 6.5%, the fastest wholesale inflation since 2022.
Energy prices explained a good deal of the elevated trend, rising by more than 10% in May alone. But even excluding food, energy and trade-services categories, wholesale prices were up by 0.8%, a rapid one-month increase.
Wednesday's consumer-inflation report showed that while the Iran conflict has continued to push prices higher, some underlying inflation trends moderated in May. Still, consumer inflation remains well above the Federal Reserve's target and has moved higher this spring, dashing hopes for rate cuts later this year.
Economists watch the PPI closely in large part because a small portion of its data are combined with consumer-inflation numbers to calculate the price index of personal-consumption expenditures, the inflation metric that the Fed explicitly targets. The core version of the PCE inflation index, which excludes food and energy costs, increased 3.3% in the 12 months through April.
After Wednesday's CPI release, many economists were forecasting that the May increase in the core PCE index will be nearly 0.3% or more, monthly inflation that annualizes to more than 3%.
Write to Matt Grossman at matt.grossman@wsj.com
(END) Dow Jones Newswires
06-11-26 0903ET
