WASHINGTON (dpa-AFX) - Partly reflecting a continued spike in energy prices, the Labor Department released a report on Thursday showing a bigger than expected increase in U.S. producer prices in the month of May.
The Labor Department said its producer price index for final demand shot up by 1.1 percent in May, matching a downwardly revised jump in April.
Economists had expected producer prices to climb by 0.7 percent compared to the 1.4 percent surge originally reported for the previous month.
The report also said the annual rate of producer price growth accelerated to 6.5 percent in May from 5.7 percent in April, reaching the fastest rate of growth since November 2022.
'If the recent cooling of gasoline and other fuel prices continues over the summer, this could be the peak for input cost inflation this year,' said Nationwide Senior Economist Ben Ayers.
He added, 'But with no end in sight for the stalemate between the U.S. and Iran, there remains upside risk the longer the Strait of Hormuz is effectively shut.'
The bigger than expected monthly increase in producer prices came amid the continued surge in energy prices, which skyrocketed by 10.7 percent in May after spiking by 7.5 percent in April.
The sharply higher energy prices along with a 0.6 percent increase in food prices contributed to a 2.8 percent jump in prices for goods.
Excluding food and energy prices, prices for good climbed by a more modest 0.8 percent in May after rising by 0.7 percent in April.
The report also said prices for services rose by 0.3 percent in May, with a 2.6 percent surge in prices for transportation and warehousing services partly offset by a 1.1 percent slump in price for trade services.
Core producer prices, which exclude prices for food, energy and trade services, climbed by 0.8 percent in May after rising by 0.5 percent in April, the Labor Department said.
The annual rate of growth by core producer prices accelerated to 5.1 percent in May from 4.4 percent in April, reaching the fastest rate of growth since October 2022.
A separate report released by the Labor Department on Wednesday showed consumer prices in the U.S. increased in line with economist estimates in the month of May.
The Labor Department said its consumer price index rose by 0.5 percent in May after climbing by 0.6 percent in April. The price growth matched expectations.
The annual rate of consumer price growth accelerated to 4.2 percent in May from 3.8 percent in April, which was also in line with estimates.
The report also said core consumer prices, which exclude food and energy prices, crept up by 0.2 percent in May after rising by 0.4 percent in April. Economists had expected core prices to increase by 0.3 percent.
The annual rate of core consumer price growth inched up to 2.9 percent in May from 2.8 percent in April, which matched expectations.
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