Key Points
- 01US Producer Price Index rose 1.1% in May and 6.5% year over year
- 02Energy and gasoline led a 2.8% jump in final demand goods prices
- 03Intermediate goods and diesel prices also recorded large increases
- 04Consumer prices climbed 0.5% in May, with gasoline up 7.0%
Wholesale inflation accelerates in May
US wholesale inflation picked up sharply in May 2026 as measured by the Producer Price Index (PPI) for final demand. The index rose 1.1% on a seasonally adjusted basis from April and was 6.5% higher than a year earlier. The 12‑month gain was the largest since November 2022, underscoring a renewed acceleration in producer‑level price pressures.
On an unadjusted basis, the final demand index was also up 6.5% over the 12 months ended in May 2026. These gains suggest that businesses across the supply chain are facing significantly higher costs than a year earlier.
Goods, not services, drive the PPI jump
Nearly 80% of the May advance in final demand prices was attributable to a 2.8% increase in the index for final demand goods. By contrast, prices for final demand services rose a more modest 0.3% over the month, indicating that the latest surge in wholesale inflation was concentrated in physical goods rather than services.
Within goods, the increase was broad based but dominated by energy. Eighty percent of the May advance in final demand goods prices can be traced to a 10.7% jump in prices for final demand energy, showing how strongly energy costs influenced overall producer inflation.
Energy, gasoline, and diesel costs surge
Energy played an outsized role in May’s inflation readings. Over half of the monthly advance in final demand goods prices was attributable to a 23.4% increase in the gasoline index for final demand. This single component accounted for a large portion of the overall wholesale price rise.
At an earlier stage of production, processed goods for intermediate demand rose 3.5% in May, the largest advance in several years. More than 60% of that broad‑based increase was linked to a 10.4% jump in prices for processed energy goods, and nearly a quarter of the gain came from a 15.7% rise in diesel fuel prices, highlighting escalating transportation and input costs.
Core producer prices also move higher
Price pressures were not limited to energy and food. Excluding these volatile categories, a core PPI measure increased 0.4% in May 2026. On a 12‑month basis, this core measure stood at roughly 4.9%, suggesting underlying inflation at the producer level remains elevated even after stripping out energy and food.
The combination of strong headline and core readings points to a broad‑based rise in producer prices, spanning both energy‑related components and other categories of goods and services.
Consumer prices rise, led by energy and gasoline
Consumer inflation also strengthened in May. The Consumer Price Index for All Urban Consumers (CPI‑U) increased 0.5% during the month and was 4.2% higher over the 12 months ending in May 2026. These figures indicate that higher prices are filtering through to households as well as businesses.
Energy again was a key driver at the consumer level. The CPI energy index rose 3.9% in May and 23.5% over the past year. The gasoline index climbed 7.0% during the month, or 8.6% before seasonal adjustment, and was 40.5% higher than a year earlier, mirroring the substantial increases seen in producer gasoline and diesel prices.
Key Takeaways
- 01Producer inflation is running at its fastest annual pace since 2022, with May data showing strong month‑on‑month and year‑on‑year gains.
- 02Energy price spikes, particularly in gasoline and diesel, are central to both producer and consumer inflation, affecting costs across the supply chain.
- 03Elevated core PPI alongside strong headline CPI suggests that inflation pressures extend beyond energy and are affecting a wide range of goods and services.