U.S. Economy

(CN) - The prices charged by U.S. producers rose at the fastest pace in four months in May, driven large by a big jump in energy prices, the government said Wednesday.

According to the Bureau of Labor Statistics, the producer price index, which measures inflation pressures before they reach the consumer, increased 0.4 percent in May after a 0.2 percent rise in April.

It was the biggest gain since a 0.4 percent increase in January.

Prices at the wholesale level fell in both February and March.

Core inflation a statistic that does not include energy and food was up 0.3 percent in May, which suggests inflation may be beginning to accelerate.

The report on wholesale prices showed that energy prices jumped 2.8 percent, the biggest one-month gain since a 5.7 percent rise in May 2015. The increase was led by a 6.6 percent rise in gasoline prices.

Gasoline prices, which had fallen sharply at the beginning of the year, have also begun to rise.

According to AAA, the nationwide average for gas is currently $2.38, the highest average since September 2015.

Food prices were up 0.3 percent in May, the biggest gain since a 0.9 percent rise in January.

Overall wholesale prices are still down 0.1 percent from a year ago while core prices are up a modest 1.2 percent.

In other economic news, the Federal Reserve said Wednesday that falling automotive production led a broader decline in U.S. industrial output in May.

The Federal Reserve said industrial output — which includes factories, mines and utilities — dropped 0.4 percent from April.

The decline reversed the 0.6 percent gain seen between April and March.

Manufacturing tumbled 0.4 percent last month, as motor vehicle production tumbled 4.4 percent. Output also fell in the clothing, electronics, and furniture manufacturing sectors.

Mining production rose 0.2 percent, helped by a rebound in coal.

But mining remains down 11.5 percent from a year ago as lower energy prices have idled many oil and gas operations.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit