U.S. Producer Prices Rise 0.5% In May Amid Rebound In Energy Prices

(RTTNews) - Producer prices in the U.S. rose by slightly more than anticipated in the month of May, according to a report released by the Labor Department on Friday, with the price growth largely reflecting a substantial rebound in energy prices.

The Labor Department said its producer price index for final demand rose by 0.5 percent in May following a 0.4 percent drop in April. Economists had expected prices to increase by 0.4 percent.

The rebound in energy prices led to the bigger than expected increase in producer prices, with energy prices surging up by 5.9 percent in May after tumbling by 2.9 percent in April.

Gasoline prices showed a substantial increase, soaring by 17.0 percent in May. The jump marked the biggest increase in gasoline prices since August of 2009.

The report also showed a notable rebound in food prices, which increased by 0.8 percent in May following a 0.9 percent drop in the previous month.

Excluding food and energy prices, core producer prices inched up by just 0.1 percent in May after falling by 0.2 percent in April. The modest uptick in core prices matched economist estimates.

The Labor Department also said the index for final demand services was unchanged in May after edging down by 0.1 percent in April.

A 0.6 percent increase in prices for trade services was offset by a 0.1 percent drop in prices for transportation and warehousing services and a 0.2 percent decrease in prices for other services.

With the monthly rebound, the Labor Department noted that producer prices in May were down by 1.1 percent year-over-year compared to the 1.3 percent drop seen in April.

The report also said the annual rate of core producer price growth slowed to 0.6 percent in May from 0.8 percent in the previous month.

Next Thursday, the Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of May.