There has been a solid increase in U.S. producer prices in May. With the surge of gasoline prices, Reuters reported that “consumer prices accelerated in May, culminating in the largest year-to-year increase since 1981”. Since the Russian invasion of Ukraine in February there has been an increase in inflation, and specially boosted oil and grain prices. They also reported the producer price index for final demand rose 0.8% last month after advancing 0.4% in April. A 1.4% jump in the price of goods accounted for nearly two-thirds of the rise in the PPI”.
Government data also saw a major increase in consumer prices in May, creating concern that inflation might be a lasting issue. “Those fears were amplified by a University of Michigan survey last week showing consumers’ five-year inflation expectation jumped in early June to a 14-year high of 3.3% from final reading of 3.0% in May.” As inflation continues to rise, not only are our day-to-day costs impacted but so is the cost to produce and get the goods we need.