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WASHINGTON (AP) – Wholesale prices rose 0.8% in May and an unprecedented amount in May, driven by rising food costs, as the U.S. economy moved out of pandemic lockdowns and spiked inflation.
The monthly rise in the producer price index, which measures inflationary pressures before it reaches consumers, followed a 0.6% rise in April and a 1% rise in March, the Labor Department reported Tuesday.
Food prices rose a whopping 2.6%, while beef and veal costs rose, while fresh fruit costs fell. Energy costs rose 2.2% and reversed a 2.4% decline in April.
In the past 12 months, wholesale prices have increased 6.6%, the largest 12-month increase since 2010.
Core inflation, which excludes volatile categories such as food and energy, rose 0.7% in May as in April, while core inflation rose 5.3% in the past 12 months, the largest increase since 2014 recorded records.
Almost 60% of the wholesale price increase from May onwards reflected a 1.5% increase in goods prices.
The prices for services rose by 0.6%.
Last week the US reported that consumer prices rose 0.6% in May, with prices rising 5% last year, the largest twelve-month gain in more than a decade.
Analysts said the large surge in wholesale prices after the sizeable rise in consumer prices underscores the current upward trend in inflation.
According to Michael Pearce, the senior US economist at Capital Economics, the scarcity of raw materials and intermediate goods is responsible for a good part of the rise in wholesale inflation.
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