As the cost of fuels surged by the most in three years, U.S. producer prices rose more than forecast in May.
The Producer-Price Index (PPI) jumped 0.5% in May (estimated at 0.3%) after 0.1% gain the previous month. Compared to last year the price increased 3.1% (est. 2.8%), the most since January 2012.
Excluding food and energy, PPI rose 0.3% (estimated at 0.2%) and was up 2.4% year over year. PPI excluding food, energy, and trade services, a measure some economists prefer because it strips out the most volatile components, rose 2.6% year over year.
The report shows that prices received by producers are picking up in response to both sturdy domestic demand and U.S.-imposed tariffs on steel and aluminum. It followed figures on June 12 that showed consumer prices accelerating in the 12 months through May by the most in more than six years.
The cost of steel mill products climbed 4.3% in May, the biggest advance since February 2011, the report showed.
Over 80% of the broad-based increase in goods prices last month was due to higher energy costs. The cost of gasoline jumped 9.8%, jet fuel was up almost 16% (most in two years) and diesel moved up 6.5%.
Some firms have also cited the continuing transportation bottlenecks and lack of truck drivers, which has forced them to pay more to get goods delivered on time.
By Katia Dmitrieva