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US Producer Prices Rise 2.6% in May as Inflationary Pressures Stay Mild

Analysts expect the Fed to pause its rate adjustments next week to assess the effect of new tariffs on future inflation.

A general view of interior of a Nucor steel factory in Blytheville, Arkansas, U.S., March 28, 2025. REUTERS/Karen Pulfer Focht/File Photo
FILE - A shopper passes by the display of cartons of eggs in a Walmart store Friday, Feb. 7, 2025, in Englewood, Colo. (AP Photo/David Zalubowski, File)
US inflation has been fairly tame to start the year; however, economists expected that price hikes would pick up speed for producers in May, in part because of rising costs from tariffs.
FORT BRAGG, NORTH CAROLINA - JUNE 10: U.S. President Donald Trump takes the stage during a rally with U.S. Army troops on June 10, 2025 at Fort Bragg, North Carolina. Trump is traveling to Fort Bragg Army base to observe a military demonstration and give remarks in honor of the U.S. Army’s 250th anniversary. (Photo by Anna Moneymaker/Getty Images)

Overview

  • The Labor Department reported that the producer price index climbed 2.6% in May from a year earlier, reversing April’s 0.2% decline with a 0.1% month-over-month gain.
  • Core wholesale costs excluding food and energy increased 0.1% from April and were up 3.0% compared to May 2024.
  • The PPI readings came in slightly below economists’ forecasts and followed consumer prices rising just 0.1% in May and 2.4% over the past year.
  • President Trump’s administration has imposed 10% tariffs on most trading partners along with duties on steel, aluminum and autos, measures economists believe could boost inflation later this year.
  • The Federal Reserve raised its benchmark rate 11 times in 2022 and 2023 and cut rates three times in 2024 as it navigated between cooling inflation and supporting the economic recovery.