A larger than expected increase in US producer prices in May
2018-06-13 02:13 pm | Resource: NEWS | No Views : 123
The Labor Department released a report on Wednesday showing a larger-than-expected increase in US producer prices in May.
The Labor Department said the PPI for final demand rose 0.5 percent in May after falling 0.1 percent in April. Economists had expected producer prices to rise by 0.3 percent.
The larger-than-expected rise in producer prices was primarily due to higher energy prices, which rose 4.6 percent in May after a 0.1 percent increase in April.
The report noted that the 1.0 per cent jump in the index for final-order goods was due to a 9.8 per cent rise in gasoline prices.
Excluding food and energy prices, core producer prices rose 0.3 percent in May after rising by 0.2 percent in April. Core prices were expected to show another 0.2% increase.
Core price growth was stronger than expected while service prices rose for the fifth month in a row, rising 0.3% in May after rising 0.1% in April.
The prices of final trade services rose by 0.9 per cent, and the prices of final transport and demand services increased by 0.7 per cent.
At the same time, the Labor Department said that the index of final services for demand is lower than trade, transport and storage has not changed. The report said that the annual rate of producer price growth accelerated to 3.1 percent in May from 2.6 percent in April, to reach a high level in more From six years.
The annual growth rate of basic product prices rose to 2.6% in May from 2.5% in the previous month.
"The rebound in producer price inflation in May supports our view that core inflation in consumer prices will rise during the rest of this year," said Michael Pierce, chief US economist at Capital Economics.
"It will keep the pressure on the Federal Reserve to keep rates up once a quarter in the next year or so."
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