Wholesale prices, driven by rising food costs, increased 0.8 percent in May and by a unprecedented amount over the past year as the U.S. economy emerges from pandemic lockdowns and pushes inflation higher.
The monthly gain in the producer price index, which measures inflation pressure before it reaches consumers, followed a 0.6 percent increase in April and a 1 percent jump in March, the Labor Department reported Tuesday.
Food prices jumped a sizable 2.6 percent with the cost of beef and veal rising, though the cost of fresh fruits declined. Energy costs rose 2.2 percent, reversing a 2.4 percent drop in April.
Over the past 12 months, wholesale prices are up 6.6 percent, the largest 12-month increase on records going back to 2010.
Core inflation, which excludes volatile categories such as food and energy, rose 0.7 percent in May, the same as April, while core inflation rose 5.3 percent over the past 12 months, the largest gain on records going back to 2014.
Nearly 60 percent of the wholesale price increase from May reflected a 1.5 percent jump in prices for goods. Prices for services rose by 0.6 percent
Last week, the U.S. reported that consumer prices rose 0.6 percent in May with prices over the past year surging by 5 percent, the biggest 12-month gain in more than a decade.
Analysts said that the big jump in wholesale prices following the sizable gain in consumer prices underscores the current upward movement in inflation.
Shortages of raw materials and intermediate goods are driving a good portion of the rise in wholesale inflation, according to Michael Pearce, the senior U.S. economist at Capital Economics.