Washington: US producer inflation rose more than expected in May, reaching its highest annual level since November 2022, according to data released Thursday by the Bureau of Labor Statistics.

According to Anadolu Agency, the Producer Price Index (PPI) increased 1.1% in May, maintaining the same pace as in April, while accelerating from a 0.7% rise in March. The monthly figure surpassed market expectations, which had anticipated a 0.7% increase.

On an annual basis, final demand prices rose by 6.5% in May, exceeding market expectations of 6.4%. This annual headline inflation rate was the highest recorded since November 2022, when the index had advanced 7.4%.

Nearly 80% of the monthly increase in final demand prices was driven by a 2.8% rise in goods, with prices for services moving up 0.3%. The increase in goods prices was the largest since the series began in December 2009. A significant portion of this advance was attributed to a 10.7% jump in energy prices, while prices for goods excluding food and energy rose 0.8%, and food prices increased by 0.6%.

Notably, more than half of the rise in goods prices was due to a 23.4% surge in gasoline prices. Additionally, prices for diesel fuel, jet fuel, plastic resins and materials, industrial chemicals, and natural gas liquids also saw increases. Conversely, pork prices fell by 10.1%, and prices for residential electric power and sanitary paper products experienced declines.

In the services sector, prices increased by 0.3% in May, slowing from a 0.7% rise in April. The May gain in services was led by a 0.7% increase in prices for services excluding trade, transportation, and warehousing. Prices for transportation and warehousing services rose by 2.6%, while margins for trade services decreased by 1.1%.

More than 40% of the increase in services prices was attributed to a 4.8% rise in prices for portfolio management. Prices for truck transportation of freight, securities brokerage and investment advice, chemicals and allied products wholesaling, food wholesaling, and airline passenger services also saw increases. Meanwhile, margins for machinery and equipment wholesaling fell by 1.9%, and prices for fuels and lubricants retailing and residential real estate loans also moved lower.

The core PPI, which excludes foods, energy, and trade services, rose by 0.8% in May, marking the largest monthly rise since March 2022. For the 12 months ending in May, the core PPI increased by 5.1%, the largest annual gain since October 2022.