US producer prices climbed last month at the fastest pace since November 2022, fueled by a surge in energy prices after the start of the Iran war. The Labor Department reported Thursday that its producer price index jumped 6.5% from May 2025. It rose 1.1% from April, as it did the previous month.

Energy Prices Soar

Wholesale gasoline prices surged by more than 23% from April to May, and nearly 70% from a year earlier. The cost of a gallon of regular gasoline has been above $4 since March, according to motor club AAA.

Excluding volatile food and energy prices, so-called core wholesale prices rose 0.4% from April and 4.9% from May 2025. Inflation is running well ahead of the Federal Reserve’s 2% target. The central bank is expected to leave its benchmark interest rate unchanged as its meeting next week.

Financial markets expect the Fed could raise rates by the end of the year in an effort to curb price increases. Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably health care and financial services, flow into the Fed’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.

Original reporting: Texarkana Gazette — read the source article.