U.S. producer prices accelerated in May as energy-driven inflation intensified.
The Labor Department said May PPI rose 6.5% YoY — the largest gain since Nov
2022 — and 1.1% MoM; core PPI ex-food and energy rose 4.9% YoY. The report
highlights that the closure of the Strait of Hormuz has amplified energy-price
shocks; with the conflict unlikely to be resolved in the near term, firms are
passing higher energy and transport costs through to other goods and services.
Combined with earlier May CPI showing the fastest increase in three years and
signs of renewed labor-market momentum, the PPI release may reinforce market
expectations of Fed rate hikes in 2026.
