Producer prices rise 6.6% in May on annual basis

Producer prices as of May rose 6.6% over the past 12 months, the fastest increase on record.

Producer prices rose at their fastest annual pace in nearly 11 years in May as inflation continued to build in the US economy, the Labor Department said Tuesday.

The 6.6% surge was the biggest 12-month rise in the final demand index since the Bureau of Labor Statistics began tracking such data in November 2010.

On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.5%.

Those higher price pressures came amid a significant slump in retail sales, which fell 1.3% in May, worse than the 0.6% estimate, according to the Census Bureau.

Goods inflation continued to be the dominant inflation force. In the pandemic economy, goods have run well ahead of services as economic lockdowns constrained consumer demand for services-related purchases.

Excluding food and energy, the 12-month final demand PPI rose 5.3%, which also was the biggest increase since that the BLS started tracking that number in August 2014.