The Producer Price Index, a closely watched gauge of wholesale inflation, rose 1.1% in May, lifting the annual rate to 6.5%, its highest in more than three years, according to a new Bureau of Labor Statistics report.

Impact on Businesses

A war-driven spike in oil prices was largely responsible for the increase in May’s PPI, BLS data showed. Wholesale inflation is running at the second-fastest pace on record, with the 1.1% increase in monthly inflation matching the rate of increase seen in April.

Economists were expecting PPI to rise 0.6% from April and the annual rate to reach 6.4%. Excluding food and energy prices, a core measurement of PPI rose 0.4% from April, holding at 4.9% annually.

Consumers are already feeling the pinch from higher gas costs: In May, elevated prices at the pump helped push overall inflation to a three-year high of 4.2%, according to the latest Consumer Price Index.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.