Wholesale prices rose rapidly in May, as the impact of inflationary pressures on the U.S. economy intensified, the Bureau of Labor Statistics in the United States reported today. Which the consumer pays.
Manufacturer’s price index, core index and their effect on consumer prices
The Producer Price Index is actually the wholesale price index in the United States. It is an index that examines the prices paid to manufacturers of goods and services, and is published every month on the date closest to the 11th of the month. The monthly increase recorded this month is in line with Dow Jones estimates, but is double the monthly rate of increase of 0.4%, recorded in April.
The index, excluding food, energy and trade (the “core index”), rose by 0.5% this month, slightly below the estimate of 0.6%, but on the other hand represents an increase compared to the more moderate increase of 0.4% in the previous month. On an annual basis, the core index rose by 6.8%, similar to the April rise.
The two PPIs, both the wholesale price index and the core index, remained close to their all-time highs – 11.5% for wholesale prices and 7.1% for the core index. Both records were recorded in March.
The data are significant because wholesale prices feed and affect consumer prices. These prices are at their highest level since December 1981. The consumer price index rose by 8.6% this month, shattering hopes that inflation had already peaked in the spring.
Federal Reserve officials closely monitor inflation data. Markets now expect the central bank to raise its short-term lending rate, following the interest rate meeting that ends on Wednesday.
When it comes to wholesale prices, energy has been a significant part of the impact on them in May. The energy demand index rose by 5% and has a significant share in the 1.4% jump in the consumer price index. The imbalance between goods and services was at the core of half-inflationary pressures, as consumer demand changed greatly in the U.S. economy, which is generally more dependent on services and less on goods.
The services index rose by 0.4%, with transportation and storage services accounting for more than half of this increase. The increases have been softened by certain reductions in fuels and lubricants, portfolio management and rental of guest rooms.
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