FX.co ★ US Producer Inflation Accelerates but Core PPI Below Expectations

US producer prices for final demand rose 1.1% month-over-month in May 2026, matching April’s downwardly revised 1.1% increase and exceeding market expectations of a 0.7% gain. Goods prices surged 2.8% after a 1.9% advance in April, with more than half of the May increase driven by a 23.4% jump in gasoline prices. Prices also climbed for diesel fuel, jet fuel, plastic resins and materials, industrial chemicals, and natural gas liquids, while pork prices fell 10.1%.

By contrast, prices for services increased 0.3%, slowing from a 0.7% rise in April. Over 40% of this monthly advance reflected a 4.8% increase in prices for portfolio management services. Offsetting some of this strength, margins for machinery and equipment wholesaling declined 1.9%, and margins also decreased for fuels and lubricants retailing.

On an annual basis, the Producer Price Index (PPI) rose 6.5%, the highest rate since November 2022 and above the consensus forecast of 6.4%. Meanwhile, core PPI, which excludes food and energy, increased 0.4% month-over-month, slightly below expectations of 0.5%, and 4.9% year-over-year, also under the projected 5.4%.