WASHINGTON — U.S. wholesale prices rose sharply in May as energy costs climbed amid ongoing disruptions in global markets, the Labor Department reported on Thursday.
The Producer Price Index for final demand increased 1.1 percent in May, the same pace as the upwardly revised gain in April, according to the Bureau of Labor Statistics. Over the 12 months through May, the index advanced 6.5 percent, the largest increase since November 2022.
Nearly 80 percent of the monthly advance stemmed from a 2.8 percent surge in prices for final demand goods, the largest gain since the series began in December 2009, the department said. Energy prices jumped 10.7 percent, with gasoline rising 23.4 percent.
Prices for final demand services moved up 0.3 percent. Excluding food, energy and trade services, the index increased 0.8 percent, the largest monthly rise since March 2022.
The increases reflect higher commodity costs linked to the conflict in the Middle East, which has affected energy supplies through key shipping routes. Economists have noted that such pressures are passing through the supply chain to businesses.
"Energy costs remain a significant driver of wholesale price pressures," a Labor Department analyst said in a briefing on the data.
The report comes a day after consumer price data showed headline inflation rising, with energy contributing to higher costs for households. Core measures of wholesale prices, which strip out volatile food and energy categories, have also shown firming in recent months.
Goods prices excluding food and energy rose 0.8 percent. Among services, increases were seen in portfolio management and other areas, though some wholesaling margins declined.
The data highlight persistent challenges for the Federal Reserve as it monitors inflation trends. Policymakers have indicated they are watching developments closely, particularly the spillover from energy markets.
Broader economic context includes recent job market indicators and fiscal policy discussions in Congress. Details on the full impact on consumer prices and business margins remain under review by analysts.
The PPI is used in part to calculate the personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge. May’s figures suggest continued transmission of higher input costs through the economy.
As of Thursday, markets were assessing the implications for monetary policy ahead of the central bank’s next meeting. The Labor Department noted that the index is subject to revision as more complete data become available.
