Producer Prices Climb as Goods Costs Soar

The Producer Price Index for final demand (also known as wholesale prices) rose 1.1% over the month in May, a similar increase to April. Over the year, producer prices jumped 6.5%, up from the 5.7% gain in April and the largest 12-month increase since November 2022. Meanwhile, prices for final demand excluding foods, energy and trade services climbed 5.1% from May 2025, the largest yearly increase since October 2022.

Within final demand, prices for services moved up 0.3% in May, after rising 0.7% in April. Meanwhile, prices for goods surged 2.8% in May, the largest monthly increase since the start of data collection in December 2009, after moving up 1.9% in April. Within the final demand services index, margins for portfolio management jumped 4.8%, accounting for over 40% of the May increase. Within the final demand goods index, prices for gasoline climbed 23.4%, accounting for over half of the May advance for the index. At the same time, prices for pork fell 10.1% from April and 12.3% from May 2025.

Prices for processed goods for intermediate demand rose 3.5% in May, the largest advance since March 2021, after moving up 2.7% in April. Within the index, prices for diesel fuel jumped 15.7%, accounting for nearly a quarter of the May increase, after increasing 12.2% in April. Meanwhile, prices for gasoline and home heating oil and distillates were up 69.5% and 87.0% year-over-year, respectively. Over the year, prices for processed goods for intermediate demand advanced 13.3%, the largest annual increase since August 2022.

Meanwhile, prices for unprocessed goods for intermediate demand moved up 4.9% in May, after increasing 1.5% in April. More than two-thirds of the monthly rise was attributable to an 11.8% surge in crude petroleum prices, which are up 78.2% over the year. In contrast, prices for natural gas fell 18.2% in May and are down 27.1% from May 2025. Over the year, prices for unprocessed goods for intermediate demand soared 22.2%, the largest gain since September 2022, after rising 14.6% in April.