Wholesale prices in the U.S. rose by 1.1% in May 2026, surpassing economists’ expectations and pushing the annual wholesale inflation rate to 6.5%, the highest level since November 2022. This increase, reported by the Bureau of Labor Statistics, indicates mounting inflationary pressures in the production pipeline. The gain matched April’s rise, but the surge was largely driven by energy costs, which saw a significant 10.7% jump, particularly in gasoline prices, which spiked 23.4% at the wholesale level.

Excluding food and energy, the core producer price index (PPI) rose 0.4% in May, slightly below the anticipated 0.5%, suggesting that fuel costs are the primary contributor to overall inflation. When removing food, energy, and trade services, the PPI climbed 0.8%, marking the largest one-month increase since March 2022. On a 12-month basis, the core PPI excluding trade services increased by 5.1%, the highest since October 2022, highlighting persistent inflationary trends in various sectors.

The robust rise in wholesale prices was fueled especially by a 2.8% jump in final demand goods prices, the largest increase on record since the data series began in December 2009. On the services side, portfolio management fees also saw a notable increase of 4.8%, boosted by a strong month for the stock market. This wholesale price report came shortly after consumer price inflation was reported to have accelerated to 4.2% year over year in May, largely due to energy price hikes tied to geopolitical tensions in the Middle East.

The continuation of elevated inflation, particularly in energy, is expected to influence Federal Reserve policy in the coming months. The Fed’s Federal Open Market Committee is set to announce its interest rate decision soon, and market expectations strongly favor maintaining current rates, with no cuts anticipated through the year. Additionally, there is a growing probability that the Fed might implement a rate hike by December, contrasting with the European Central Bank’s recent decision to raise rates in response to the inflation surge.