producer prices increased

Washington — Partly reflecting a continued spike in energy prices, the US Labor Department released a report on Thursday showing a bigger than expected increase in US producer prices in the month of May.

The Labor Department said its producer price index for final demand shot up by 1.1% in May, matching a downwardly revised jump in April.

Economists had expected producer prices to climb by 0.7% compared to the 1.4% surge originally reported for the previous month.

The report also said the annual rate of producer price growth accelerated to 6.5% in May from 5.7% in April, reaching the fastest rate of growth since November 2022.

Notes from APS Radio News

This website publishes the descriptions of indexes as those are actually presented at the Bureau of Labor Statistics.

Producer Price Index News Release summary

The Producer Price Index for final demand rose 1.1 percent in May, seasonally adjusted, the U.S.
Bureau of Labor Statistics reported today. Final demand prices advanced 1.1 percent in April and
0.7 percent in March. (See table A.) On an unadjusted basis, the index for final demand increased
6.5 percent for the 12 months ended in May, the largest 12-month rise since moving up 7.4
percent in November 2022.

Nearly 80 percent of the May advance in final demand prices is attributable to a 2.8-percent
increase in the index for final demand goods. Prices for final demand services moved up 0.3
percent.

The index for final demand less foods, energy, and trade services rose 0.8 percent in May, the
largest advance since increasing 0.9 percent in March 2022. For the 12 months ended in May,
prices for final demand less foods, energy, and trade services moved up 5.1 percent, the largest
12-month rise since jumping 5.5 percent in October 2022.

Final Demand

Final demand goods: The index for final demand goods moved up 2.8 percent in May, the largest
increase since data were first calculated in December 2009. Eighty percent of the broad-based
advance can be traced to a 10.7-percent jump in prices for final demand energy. The indexes for final
demand goods less foods and energy and for final demand foods also rose, 0.8 percent and 0.6
percent, respectively.

Product detail: Over half of the May advance in prices for final demand goods is attributable to a
23.4-percent increase in the index for gasoline. Prices for diesel fuel, jet fuel, plastic resins and
materials, industrial chemicals, and natural gas liquids also rose. In contrast, the index for pork fell
10.1 percent. Prices for residential electric power and for sanitary paper products also declined. (See
table 2.)

Final demand services: The index for final demand services moved up 0.3 percent in May following
a 0.7-percent advance in April. Leading the May increase, prices for final demand services less trade,
transportation, and warehousing rose 0.7 percent. The index for final demand transportation and
warehousing services moved up 2.6 percent. Conversely, margins for final demand trade services
decreased 1.1 percent. (Trade indexes measure changes in margins received by wholesalers and
retailers).

Product detail: Over 40 percent of the May advance in the index for final demand services can be
traced to a 4.8-percent rise in prices for portfolio management. The indexes for truck transportation
of freight; securities brokerage, dealing, investment advice, and related services; chemicals and allied
products wholesaling; food wholesaling; and airline passenger services also increased. In contrast,
margins for machinery and equipment wholesaling fell 1.9 percent. The indexes for fuels and
lubricants retailing and for residential real estate loans (partial) also moved lower.

Intermediate Demand by Commodity Type

Within intermediate demand in May, prices for processed goods increased 3.5 percent, the index for
unprocessed goods rose 4.9 percent, and prices for services moved up 0.5 percent. (See tables B and
C.)

Processed goods for intermediate demand: The index for processed goods for intermediate
demand rose 3.5 percent in May, the largest advance since moving up 3.5 percent in March 2021.
Over 60 percent of the broad-based May increase can be attributed to a 10.4-percent jump in prices
for processed energy goods. The indexes for processed materials less foods and energy and for
processed foods and feeds also moved higher, 1.8 percent and 0.7 percent, respectively. For the 12
months ended in May, prices for processed goods for intermediate demand advanced 13.3 percent,
the largest 12-month rise since increasing 14.3 percent in August 2022.

Product detail: Nearly a quarter of the May increase in the index for processed goods for
intermediate demand can be attributed to a 15.7-percent rise in prices for diesel fuel. The indexes for
gasoline, industrial chemicals, jet fuel, plastic resins and materials, and lubricating oil base stocks
also advanced. Conversely, prices for pork declined 10.1 percent. The indexes for asphalt and for
particleboard and fiberboard also moved lower.

Unprocessed goods for intermediate demand: Prices for unprocessed goods for intermediate
demand moved up 4.9 percent in May following a 1.5-percent advance in April. Half of the broad-
based May increase can be attributed to a 6.9-percent jump in the index for unprocessed energy
materials. Prices for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood materials
less energy also rose, 4.8 percent and 2.6 percent, respectively. For the 12 months ended in May, the
index for unprocessed goods for intermediate demand moved up 22.2 percent, the largest 12-month
advance since increasing 29.2 percent in September 2022.

Product detail: More than two-thirds of the May increase in prices for unprocessed goods for
intermediate demand can be traced to an 11.8-percent advance in the index for crude petroleum.
Prices for corn; slaughter cattle; raw milk; aluminum base scrap; and hay, hayseeds, and oilseeds also
rose. In contrast, the index for natural gas decreased 18.2 percent. Prices for slaughter barrows and
gilts and for high-grade recyclable paper also declined.

ervices for intermediate demand: The index for services for intermediate demand increased 0.5
percent in May after rising 0.9 percent in April. More than 70 percent of the May advance is
attributable to prices for services less trade, transportation, and warehousing for intermediate
demand, which moved up 0.5 percent. The index for transportation and warehousing services for
intermediate demand increased 1.2 percent. Conversely, margins for trade services for intermediate
demand fell 0.2 percent. For the 12 months ended in May, prices for services for intermediate
demand jumped 4.7 percent, the largest 12-month advance since rising 4.7 percent in July 2023.

Product detail: Over 40 percent of the May increase in the index for services for intermediate
demand can be traced to a 5.4-percent rise in prices for securities brokerage, dealing, investment
advice, and related services. The indexes for transportation of freight and mail; chemicals and allied
products wholesaling; portfolio management; metals, minerals, and ores wholesaling; and food
wholesaling also advanced. In contrast, margins for machinery and equipment parts and supplies
wholesaling declined 1.2 percent. Prices for business loans (partial) and for warehousing, storage,
and related services also fell.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: The index for stage 4 intermediate demand increased 1.1 percent in
May, the largest advance since rising 1.2 percent in March 2022. In May, prices for total goods inputs
to stage 4 intermediate demand jumped 1.5 percent, and prices for total services inputs moved up 0.7
percent. (See table D.) Advances in the indexes for gasoline; portfolio management; securities
brokerage, dealing, investment advice, and related services; diesel fuel; chemicals and allied products
wholesaling; and transportation of freight and mail outweighed declines in the indexes for machinery
and equipment parts and supplies wholesaling, gross rents for retail properties, and pork. For the 12
months ended in May, prices for stage 4 intermediate demand increased 6.5 percent, the largest 12-
month rise since moving up 7.1 percent in November 2022.

Stage 3 intermediate demand: The index for stage 3 intermediate demand advanced 1.9 percent in
May, the largest increase since rising 1.9 percent in May 2022. In May 2026, prices for total goods
inputs to stage 3 intermediate demand moved up 3.5 percent, and the index for total services inputs
climbed 0.3 percent. Rising prices for diesel fuel, raw milk, transportation of freight and mail,
gasoline, industrial chemicals, and slaughter steers and heifers outweighed decreases in the indexes
for slaughter barrows and gilts, asphalt, and business loans (partial). For the 12 months ended in
May, prices for stage 3 intermediate demand moved up 7.2 percent, the largest 12-month increase
since jumping 8.1 percent in November 2022.

Stage 2 intermediate demand: The index for stage 2 intermediate demand rose 2.4 percent in May,
the largest advance since increasing 3.1 percent in August 2022. In May, prices for total goods inputs
to stage 2 intermediate demand jumped 5.6 percent, and the index for total services inputs moved up
0.2 percent. Higher prices for crude petroleum; plastic resins and materials; industrial chemicals;
diesel fuel; natural gas liquids; and securities brokerage, dealing, investment advice, and related
services outweighed decreases in the indexes for natural gas, business loans (partial), and fuels and
lubricants retailing. For the 12 months ended in May, prices for stage 2 intermediate demand
increased 12.5 percent, the largest 12-month advance since rising 16.1 percent in September 2022.

Stage 1 intermediate demand: The index for stage 1 intermediate demand rose 3.2 percent in May,
the largest increase since data were first calculated in December 2009. In May, prices for total goods
inputs to stage 1 intermediate demand advanced 5.0 percent, and the index for total services inputs
moved up 0.9 percent. Rising prices for industrial chemicals; diesel fuel; gasoline; aluminum base
scrap; jet fuel; and securities brokerage, dealing, investment advice, and related services outweighed
declines in the indexes for fuels and lubricants retailing; building materials, paint, and hardware
wholesaling; and natural gas. For the 12 months ended in May, prices for stage 1 intermediate
demand advanced 12.3 percent, the largest 12-month increase since moving up 15.6 percent in June
2022.