Producer prices climb 6.6% in May on annual basis, largest 12-month increase on record
PUBLISHED TUE, JUN 15 20218:34 AM EDTUPDATED TUE, JUN 15 202111:17 AM EDT
Producer prices rose at their fastest annual clip in nearly 11 years in May as inflation continued to build in the U.S. economy, the Labor Department reported Tuesday.
The 6.6% surge was the biggest 12-month rise in the final demand index since the Bureau of Labor Statistics began tracking the data in November 2010.
On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.5%.
Those higher price pressures came amid a pronounced dip in retail sales, which fell 1.3% in May, worse than the 0.6% estimate, according to the Census Bureau. The disappointment in that number was tempered by a sharp upward revision to the April number, which went from flat to a gain of 0.9%.
Goods inflation continued to be the dominant inflation force, rising 1.5% as opposed to a 0.6% increase in services. In the pandemic economy, goods have run well ahead of services as economic lockdowns constrained consumer demand for services-related purchases.
Excluding food and energy, the 12-month final demand PPI rose 5.3%, which also was the biggest increase since that the BLS started tracking that number in August 2014.
Substantial price increases at the producer end came from nonferrous metals, which jumped 6.9% for the month. Prices of grains also surged, rising 25.7%, while oilseeds increased 19.5% and beef and veal rose 10.5%. Fresh fruits and melons fell 1.9%, while basic organic chemicals and asphalt also declined.
Though services continued to be a lower contributor to overall producer price pressures, the index rose for the fifth straight month.
The higher numbers likely will add to an ongoing debate over whether the inflation pressures over the past several months will last.