Wholesale prices rose 10.8% in May, near a record annual pace

Workers inspect a Rivian R1T electric vehicle (EV) pickup truck on the assembly line at the company’s manufacturing facility in Normal, Illinois, US., on Monday, April 11, 2022.

The Bureau of Labor Statistics reported Tuesday that wholesale prices increased at a rapid pace in May.

The producer price index increased for the month and the year. The increase was in line with expectations and doubled in April.

The corePPI, which excludes food, energy and trade, rose 0.4% in the previous month, slightly above the estimate, but still below the previous month's reading. The core measure was up 6.8% over the course of the year.

The headline and core measures were close to their historic highs.

The data shows that prices at the wholesale level are running at their highest levels since 1981 The consumer price index increased in May despite expectations that it had peaked.

The inflation numbers are watched closely by the Fed. The central bank is expected to raise benchmark short-term borrowing rates by 75 basis points.

Energy made up a large part of the May gains. The final demand energy index increased by 5% on the month. Consumer demand has shifted strongly in an economy that is more dependent on services, which has led to the inflation pressures.

Multiple other fuel categories pushed higher as well, with gasoline rising 8.4%.

Warehousing and transportation services accounted for more than half of the gain in the services index. There were declines in fuels and lubricants.

The stock market futures rebounded after the release. After huge gains Monday, the benchmark 10-year note's yield fell to 3.32%.