US PPI Surges 6.5% Year-on-Year in May, Fastest Since November 2022, as Iran War Fans Inflation

According to Bloomberg, US producer prices rose 6.5% in May from a year earlier, the fastest pace since November 2022, as the Iran war's energy shock continued to spread through the broader economy. The producer price index advanced 1.1% from April, Bureau of Labor Statistics data showed. A core measure excluding food and energy climbed 4.9% year-on-year. Energy prices surged 10.7% in May, while transportation and warehousing costs — which spiked in the first two months of the conflict — posted a further 2.6% advance, with trucking freight rates elevated by war-related fuel surcharges and a thinning driver pool. Food prices rose 0.6%, the most in three months, pushed by bad weather, war disruptions, and tariffs; fertilizer materials costs were up 28% from a year earlier. Plastic resins and materials surged 14% on the month, the sharpest monthly gain in that input category since 2021. Defense procurement prices rose nearly 15% year-on-year, with economists citing munitions replenishment as one driver after record-high defense capital goods orders in April. Wholesale and retail trade services margins contracted by the most in nearly a year, a sign companies are absorbing rather than passing on costs. The report reinforces calls for the Federal Reserve to raise rates in 2026, coming alongside CPI data this week showing consumer prices at a three-year high. A separate report showed weekly initial jobless claims rose to the highest since February.