Producer Prices Rise 6.6% in May
June 15, 2021
Producer Price Index for final demand increased 0.8 percent in May, seasonally
adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand
prices rose 0.6 percent in April and 1.0 percent in March. (See table A.) On an
unadjusted basis, the final demand index advanced 6.6 percent for the 12 months
ended in May, the largest increase since 12-month data were first calculated in
Nearly 60 percent of the May increase in the index for final demand can be
traced to a 1.5-percent rise in prices for final demand goods. The index for
final demand services moved up 0.6 percent.
Prices for final demand less foods, energy, and trade services increased 0.7
percent in May, the same as in April. For the 12 months ended in May, the index
for final demand less foods, energy, and trade services climbed 5.3 percent, the
largest increase since 12-month data were first calculated in August 2014.
Final demand goods: Prices for final demand goods advanced 1.5 percent in May
after rising 0.6 percent in April. Over 40 percent of the broad-based increase
in May can be traced to the index for final demand goods less foods and energy,
which moved up 1.1 percent. Prices for final demand foods and for final demand
energy also advanced, 2.6 percent and 2.2 percent, respectively.
Product detail: Within the index for final demand goods in May, prices for
nonferrous metals rose 6.9 percent. The indexes for beef and veal; diesel fuel;
gasoline; hay, hayseeds, and oilseeds; and motor vehicles also advanced. In
contrast, prices for fresh fruits and melons declined 1.9 percent. The indexes
for primary basic organic chemicals and for asphalt also moved lower.
demand services: Prices for final demand services rose 0.6 percent in May, the
fifth consecutive increase. Forty percent of the broad-based May advance can be
traced to the index for final demand trade services, which moved up 0.7 percent.
(Trade indexes measure changes in margins received by wholesalers and
retailers.) Prices for final demand services less trade, transportation, and
warehousing and for final demand transportation and warehousing services also
rose, 0.2 percent and 1.9 percent, respectively.
Product Detail: Over 40 percent of the May increase in the index for final
demand services is attributable to margins for automobile retailing (partial),
which jumped 27.3 percent. The indexes for truck transportation of freight;
apparel, footwear, and accessories retailing; portfolio management; chemicals
and allied products wholesaling; and hardware, building materials, and supplies
retailing also rose. Conversely, margins for food retailing fell 3.6 percent.
The indexes for traveler accommodation services and for airline passenger
services also decreased.