WASHINGTON -- U.S. wholesale prices last month posted the biggest 12-month gain since January 2012, a sign that the strong economy is beginning to rouse inflation.
The Labor Department said Wednesday that its producer price index-- which measures inflation before it reaches consumers-- rose 3.1 percent from May 2017. The index rose 0.5 percent from April, the biggest one-month increase since January. In April, producer prices rose just 0.1 percent.
Energy prices, pulled higher by surging gasoline prices, rose 4.6 percent last month from April, the biggest jump in three years.
Food prices rose just 0.1 percent, and seafood prices fell a record 13.1 percent.
Core wholesale prices -- which exclude the volatile food and energy sectors -- rose 0.3 from April and 2.4 percent from May 2017.
The Federal Reserve raised short-term interest rates Wednesday for the second time this year and the seventh time since December 2015 as inflation hits the central bank's annual 2 percent target.
On Tuesday, the Labor Department reported that consumer prices rose 0.2 percent in May, largely on soaring gasoline costs, and 2.8 percent over the past year, the fastest 12-month jump since February 2012.
But core consumer prices have risen a milder 2.2 percent over the past 12 months.
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.
The cost of steel mill products climbed 4.3 percent in May, the biggest advance since February 2011, the report showed.
In March, the Trump administration imposed 25 percent tariffs on steel imports and 10 percent on aluminum. The government expanded those on June 1 by removing temporary country exemptions for the European Union, Canada and Mexico.
Over 80 percent of the broad-based increase in goods prices last month was due to higher energy costs. The cost of gasoline jumped 9.8 percent, jet fuel was up almost 16 percent (the most in two years) and diesel moved up 6.5 percent.
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.
Information for this article was contributed by Paul Wiseman of The Associated Press and by Katia Dmitrieva and Chris Middleton of Bloomberg News.
Business on 06/14/2018
Print Headline: Wholesale-price gauge jumps in May