In this April 22 photo, Marie Tibbott sorts products at EIP Manufacturing in Earlville, Iowa.
Jessica Reilly / Telegraph Herald via AP, FILE
WASHINGTON (AP) – Wholesale prices, driven by rising food costs, rose 0.8% in May and by an unprecedented amount in the past year as the US economy exits pandemic blockages and pushes inflation up.
The monthly gain in the Producer Price Index, which measures inflationary pressure before it reaches consumers, followed a 0.6% increase in April and a 1% jump in March, reported Tuesday the Department of Labor.
Food prices jumped 2.6% as the price of beef and veal increased, although the price of fresh fruit declined. Energy costs rose 2.2%, reversing a 2.4% drop in April.
Wholesale prices have risen 6.6% in the past 12 months, the largest 12-month increase since record highs in 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 % over the past 12 months, the largest increase since 2014.
The nearly 60% increase in wholesale prices from May reflected a 1.5% increase in prices for goods. Prices for services rose 0.6%.
Last week, the United States reported that consumer prices rose 0.6% in May, with prices rising 5% in the past year, the largest 12-month increase in addition of a decade.
Analysts said the big jump in wholesale prices following the dramatic rise in consumer prices underscores the current upward movement in inflation.
Shortages of raw materials and intermediate goods are behind much of the rise in wholesale inflation, according to Michael Pearce, senior US economist at Capital Economics.