WASHINGTON — U.S. producer prices rose sharply in May, driven primarily by higher energy costs amid ongoing geopolitical tensions, according to data released by the Labor Department on Thursday.
The Producer Price Index for final demand increased 1.1 percent in May after a similar gain in April, the Bureau of Labor Statistics said. Over the 12 months through May, the index advanced 6.5 percent, the largest rise since late 2022.
Prices for final demand goods jumped 2.8 percent, the biggest monthly increase since the series began in 2009, with about 80 percent of the advance traced to a 10.7 percent surge in final demand energy prices, BLS data showed. Gasoline prices rose 23.4 percent, while increases were also recorded for diesel fuel, jet fuel and other energy products.
“Energy was at the root of the unexpectedly high gain in producer prices,” analysts noted in reaction to the report, pointing to supply disruptions linked to conflicts in the Middle East.
Prices for final demand services rose 0.3 percent. Excluding food, energy and trade services, the index increased 0.8 percent, the largest monthly gain since March 2022, and was up 5.1 percent over the year.
The data come as energy markets continue to reflect pressures from restrictions in key shipping routes and broader regional instability. Economists had expected a more moderate monthly increase of about 0.7 percent.
Administration officials and Federal Reserve policymakers have been monitoring wholesale price trends closely for signs of persistent inflationary pressures. The PPI often serves as a leading indicator for future consumer price movements.
The report follows recent consumer price data showing similar influences from energy costs. Details on specific industry impacts or revisions to prior months were included in the full release.
As of Thursday, the Labor Department provided no additional forward-looking commentary. Markets were assessing the implications for monetary policy, though officials have not issued immediate statements on the latest figures. The next PPI release, covering June data, is scheduled for mid-July.
