Wholesale costs in the U.S. surged in May against the backdrop of rising oil prices, adding upward pressure on inflation in a steadily growing economy marked by supply bottlenecks and shortages of skilled labour.
Figures released Wednesday morning by the U.S. Labor Department showed the U.S. producer price index (PPI) jumped 0.5% in May.
Most of the increase was due to higher oil prices, which President Trump complained about in an early-morning tweet criticizing OPEC.
So-called core producer prices that exclude food, energy and trade rose a much smaller 0.1% last month.
Wholesale costs rose at a yearly rate of 3.1% in May, marking the highest level since early 2012.
The increase in the core rate over the past 12 months edged up to 2.6% from 2.5%.
The wholesale cost of gas leaped almost 10% in May, the biggest increase since last fall.
Steel-mill products also increased 4.3%, the largest advance in seven years. Companies rushed to stock up on steel and related supplies after the Trump administration announced broad tariffs on foreign imports.
Aside from energy and steel, though, the cost of most goods was little changed. Food prices barely rose.
The true cost is better seen through the consumer price index that measures what individuals actually pay. The CPI increased again in May to push the cost of living over the past 12 months to the highest clip in more than six years.
Inflation has been rising gradually over the past year, an upturn reflected in key price barometers such as the PPI and CPI. The result is that the Federal Reserve is widely expected later Wednesday to raise a key U.S. interest rate for the seventh time since the end of 2015.
