WASHINGTON, D.C. (RFD NEWS) — Producer prices rose sharply in May, signaling renewed inflation pressure at the wholesale level across the U.S. economy, according to the latest report from the U.S. Bureau of Labor Statistics.
The Producer Price Index for final demand increased 1.1 percent in May (seasonally adjusted), matching April’s gain and extending a multi-month trend of accelerating price growth. On a year-over-year basis, final demand prices are up 6.5 percent, the largest annual increase since late 2022.
Pork Prices Move Sharply Lower
One notable move in the report came from the livestock sector, where pork prices dropped 10.1 percent in May, according to the Producer Price Index.
The decline stands out against broader inflation pressures in food and energy markets. Analysts point to shifting supply conditions and processing margins as key drivers behind the monthly drop.
While many agricultural inputs saw upward pressure — including cattle, raw milk, and feed commodities — pork moved in the opposite direction, providing a rare pocket of relief within an otherwise inflationary report.
Energy and Goods Drive the Increase
Nearly 80 percent of May’s monthly rise came from goods prices, which surged 2.8 percent, led by a steep jump in energy costs.
- Gasoline prices spiked 23.4 percent, the single largest contributor to the increase
- Diesel, jet fuel, industrial chemicals, and natural gas liquids also rose
- Food prices edged up modestly, up 0.6 percent
Services rose more slowly, increasing by 0.3 percent, though transportation and warehousing costs rose.
Core Inflation Pressures Also Rising
The index excluding food, energy, and trade services rose 0.8 percent, the strongest monthly gain since 2022. Over the past year, that “core” measure is up 5.1 percent, indicating persistent underlying inflationary pressure.
Intermediate Demand Shows Broad Cost Inflation
Producer inflation was even more pronounced earlier in the supply chain:
- Processed goods for intermediate demand: +3.5 percent
- Unprocessed goods: +4.9 percent
- Intermediate services: +0.5 percent
Crude oil, diesel fuel, industrial chemicals, and agricultural commodities such as corn, cattle, and raw milk all moved higher, while natural gas and pork prices declined.
