Business inflation in May surged to its highest level since late 2022, as high fuel prices triggered by the war with Iran ripple across the U.S.economy.
Subscribe to read this story ad-free Get unlimited access to ad-free articles and exclusive content.New data released Thursday showed that from April to May, the producer price index saw a 1.1% month-over-month rise.Even more notably, it rose to 6.5% from the same period a year ago.
The year-over-year reading was “the largest 12-month rise since moving up 7.4% in November 2022,” the Bureau of Labor Statistics said in a statement.The data comes one day after the consumer price index showed that overall inflation rose in May to its highest level since early 2023.Core PPI, which excludes food and energy costs, rose to 4.9% annually.The jump in producer prices surprised economists and drew renewed attention to President Donald Trump’s remark Wednesday at the White House where he said, “I love the inflation.”“When the war is over, it’s coming down, it’s going to come down like a rock,” Trump added.
The president later claimed that his words had been taken out of context, telling the New York Post, “The numbers are much lower than anticipated.”But neither Wednesday’s consumer price index nor Thursday’s business inflation report were lower than expected.The direct line from higher gas prices to higher inflation was stark: BLS said that 80% of the surge in the overall PPI figure Thursday was attributable to surging energy costs.Taken together, the PPI and CPI readings reveal an economy under ever more stress from oil prices that remain 40% higher since the United States and Israel launched the Iran war Feb.
28.So far this year, oil prices have climbed about 60%.E.J.Antoni, Trump’s former nominee to lead BLS, described the business inflation report Thursday as “eye-watering.”“This is getting really ugly,” he wrote in a post on X.
Thursday’s data will also likely factor into the a...