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 a bout of inflation that shows no sign of slowing
WASHINGTON — 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 by the Labor Department showed that producer prices, which measure inflation before it reaches consumers, rose slightly last month from April. It jumped 10.9% compared to a year ago and is down from a 11.5% annual gain in March.
Producer prices increased 0.8% in May compared to April, which was 0.4% more than the previous month.
These figures show that rising prices will continue reducing Americans’ paychecks and wreaking havoc on household budgets over the next months. President Joe Biden and congressional Democrats have been plagued by inflation. The Federal Reserve has had to take a series of drastic interest rate increases in an effort to slow down the economy and reduce price rises.
The government reported Friday that inflation, as measured by the consumer price index, rose to an 40-year record of 8.6% in May. This unexpected gain disappointed expectations that price rises might be slowing. The Russian invasion of Ukraine pushed up food and gas prices. However, rent, new and used cars, medical services, and clothing all rose, which is evidence that inflation is spreading wider through the economy.
The producer price data tracks inflation at an earlier stage in production and can sometimes indicate where consumer prices are heading. It feeds into the Federal Reserve’s preferred measure for inflation, the personal consumption expenditures prices index.
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