May US producer prices soared 10.8 % as energy prices jumped
U.S. producer prices surged 10.8% in May from a year earlier, underscoring the ongoing threat to the economy from inflation that shows no sign of slowing.
Thursday's report from the Labor Department showed that the producer price index - which measures inflation before it reaches consumers - rose at slightly slower pace last month than in April, when it jumped 10.9% from a year earlier, and is down from an 11.5% yearly gain in March.
On a monthly basis, producer prices climbed 0.8% in May from April, above the previous month, when they increased 0.4%.
The figures indicate that rising prices will continue to erode Americans' paychecks and play havoc with household budgets in the coming months. Inflation has created major political headaches for President Joe Biden and congressional Democrats and has forced the Federal Reserve into a series of rapid interest rate hikes intended to slow the economy and cool price increases.
On Friday, the government reported that inflation - as measures by the consumer price index - jumped to a new 40-year high of 8.6% in May, a surprise gain that disappointed expectations that price increases could be slowing. Gas and food costs rose sharply, pushed higher by Russia's invasion of Ukraine, but the costs for rent, new and used cars, medical care, and clothing also rose, evidence that inflation is spreading more broadly through the economy.
The producer price data captures inflation at an earlier stage of production and can sometimes signal where consumer prices are headed. It also feeds into the Federal Reserve’s preferred measure of inflation, the personal consumption expenditures price index.