Energy Costs Push Producer Prices up 0.5%
The Producer Price Index for finished goods increased by a seasonally adjusted 0.5% for May, according to a Labor Department report (link opens in PDF) released today.
After falling 0.7% in April, these newest numbers put index growth back in the black. Analysts had expected an increase, but their 0.2% estimate proved too conservative.
A deeper dive into the data reveals the extent to which volatile energy and food prices affected May's report. Food prices shot up a seasonally adjusted 0.6%, while energy prices jumped 1.3% after dropping 2.5% in April. Excluding these goods, producer price increases clocked in at 0.1%, matching analysts' predictions for that measure.
Moving back along the supply chain, prices for intermediate goods fell 0.1%, or 0.4% excluding food and energy. Industrial chemicals proved the primary culprit of cheaper prices, down 2.3%.
Meanwhile, a 5% jump in crude energy and 2.1% increase in crude foodstuffs pushed the crude goods' index up 2.2% for May. Without these two sectors, crude goods fell 2.3%, mostly due to a 6.3% drop in carbon steel scrap.
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