clearn.png
Thursday October 6th, 2022 12:16AM

May US producer prices soared 10.8% as energy prices jumped

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — U.S. producer prices surged 10.8% in May from a year earlier, underscoring the ongoing threat to the economy from inflation that shows no sign of slowing.

Tuesday's report from the Labor Department showed that the producer price index — which measures inflation before it reaches consumers — rose at slightly slower pace last month than in April, when it jumped 10.9% from a year earlier, and is down from an 11.5% yearly gain in March.

On a monthly basis, producer prices climbed 0.8% in May from April, above the previous month, when they increased 0.4%.

Energy prices, led by gas, rose 5% just in May from April. Another big driver of the price gains last month was a sharp 2.9% increase in the cost of truck freight hauling, a sign that supply chain problems still aren't fully resolved. Food costs were unchanged.

The figures indicate that rising prices will continue to erode Americans' paychecks and wreak havoc on household budgets in the coming months. Inflation has created major political headaches for President Joe Biden and congressional Democrats and has forced the Federal Reserve into a series of rapid interest rate hikes intended to slow the economy and cool price increases.

On Friday, the government reported that inflation — as measured by the consumer price index — jumped to a new 40-year high of 8.6% in May, a surprise gain that disappointed expectations that price increases might be slowing. Gas and food costs rose sharply, pushed higher by Russia's invasion of Ukraine, but the costs for rent, new and used cars, medical care, and clothing also rose, evidence that inflation is spreading more broadly through the economy.

The Federal Reserve is expected to hike its short-term interest rate by three-quarters of a point on Wednesday, the largest increase since 1994, as it ramps up its efforts to rein in higher prices.

The producer price data captures inflation at an earlier stage of production and can sometimes signal where consumer prices are headed. It also feeds into the Federal Reserve’s preferred measure of inflation, the personal consumption expenditures price index.

Strong consumer spending has pushed up demand for a range of goods and services, which has in turn overwhelmed supply chains, creating shortages in some cases and pushing up prices. Greater demand for travel this spring and summer has also sent hotel and airfare prices soaring.

How long that consumer demand will last is a key question for the economy going forward. Millions of Americans have enjoyed solid pay raises in the past year, including lower-income workers at restaurants, hotels, and warehouses.

Consumers also have greater savings than is typically the case from government stimulus checks and because they weren’t able to spend as much on travel and entertainment in the past two years. Those savings are supporting ongoing spending even amid high prices.

Yet prices are rising at a faster pace than wages, on average, suggesting that eventually consumers may have little choice but to pull back on spending.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Industries, AP Business - Financial Services
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
May US producer prices soared 10.8% as energy prices jumped
U.S. producer prices surged 10.8% in May from a year earlier, underscoring the ongoing threat to the economy from a bout of inflation that shows no sign of slowing
9:07AM ( 5 minutes ago )
Coinbase Global plans to cut 1,100 jobs, or 18% of staff
Coinbase Global says it plans to cut about 1,100 jobs, or approximately 18% of its global workforce, as part of a restructuring in order to help manage its operating expenses in response to current market conditions
8:57AM ( 14 minutes ago )
Grenfell victim names read out at 5th anniversary memorial
The names of the 72 people who lost their lives in a London high-rise tower blaze have been read out at a memorial service to mark five years since the tragedy
8:56AM ( 15 minutes ago )
Associated Press (AP)
Congress examines fraud in pandemic aid for small businesses
A congressional panel is set to examine payouts under a federal coronavirus pandemic aid program intended to help small businesses weather the COVID-19 outbreak
8:04AM ( 1 hour ago )
Musk to address Twitter employees for 1st time this week
Elon Musk will address Twitter employees Thursday for the first time since the billionaire and Tesla CEO offered $44 billion to buy the social media platform
8:02AM ( 1 hour ago )
The S&P 500 is in a bear market; here’s what that means
Wall Street opened the week with heavy losses that put the benchmark S&P 500 at a level considered to be a so-called bear market
8:01AM ( 1 hour ago )
AP Business
UN chief: Governments' inaction on climate is 'dangerous'
The head of the United Nations has warned of a “dangerous disconnect” between what scientists and citizens are demanding to curb climate change, and what governments are actually doing about it
4:23AM ( 4 hours ago )
Wall Street slips into a bear market; here’s what that means
Wall Street opened the week with heavy losses that put the benchmark S&P 500 at a level considered to be a so-called bear market
2:17AM ( 6 hours ago )
US futures point to a bear market; here’s what that means
Wall Street looks like it will open the week with more losses, with the S&P 500 falling to a level that market observers consider to be a so-called bear market
1:49AM ( 7 hours ago )
AP Business - Economy
Wall Street enters a bear market as the S&P 500 dives 3.9%
Wall Street entered a bear market Monday as the S&P 500 sank 3.9%, bringing it more than 20% below the record high it set in January
4:13PM ( 16 hours ago )
Bear market growls on Wall Street as stocks and crypto dive
Fears about a fragile economy are forcing Wall Street toward what’s known as a bear market, with the S&P 500 tumbling more than 20% below its record set early this year
3:18PM ( 17 hours ago )
Will money-back guarantee win over wealthy donors?
The advocacy group Global Citizen and the finance firm NPX are engineering a new campaign that targets Forbes 400 billionaires, Giving Pledge members, and the wealthy generally — a group increasingly criticized for what is seen as tight purse strings
2:22PM ( 18 hours ago )
AP Business - Industries
World shares sink after inflation-driven retreat on Wall St
Shares are lower in Europe and Asia after a report that U.S. inflation worsened last month sent stocks reeling on Wall Street
5:54AM ( 1 day ago )
Asian shares sink after inflation-driven retreat on Wall St
Shares are lower in Asia after a report that U.S. inflation worsened last month sent stocks reeling on Wall Street
2:00AM ( 1 day ago )
US inflation at new 40-year high as price increases spread
The prices of gas, food and most other goods and services jumped in May, raising inflation to a new four-decade high and giving American households no respite from rising costs
5:36PM ( 3 days ago )
AP Business - Financial Services
Coinbase Global plans to cut 1,100 jobs, or 18% of staff
Coinbase Global says it plans to cut about 1,100 jobs, or approximately 18% of its global workforce, as part of a restructuring in order to help manage its operating expenses in response to current market conditions
8:57AM ( 15 minutes ago )
Grenfell victim names read out at 5th anniversary memorial
The names of the 72 people who lost their lives in a London high-rise tower blaze have been read out at a memorial service to mark five years since the tragedy
8:56AM ( 15 minutes ago )
Russians control 80% of contested city in eastern Ukraine
A regional governor in Ukraine says the city of Sievierodonetsk — the main focus of the war in eastern Ukraine in recent weeks — is not yet blocked off by Russian troops
8:45AM ( 26 minutes ago )
Amber Heard says she stands by 'every word' of her testimony
Amber Heard says she stands by the testimony she gave during a contentious six-week libel trial against former husband Johnny Depp, saying she has “always told the truth.”
8:43AM ( 28 minutes ago )
May US producer prices soared 10.8 % as energy prices jumped
U.S. producer prices surged 10.8% in May from a year earlier, underscoring the ongoing threat to the economy from a bout of inflation that shows no sign of slowing
8:37AM ( 34 minutes ago )