The numbers: The cost of wholesale goods and services jumped 0.8% in May and added to mounting evidence that the highest U.S. inflation in 40 years will persist through the summer.
Economists polled by The Wall Street Journal had forecast a 0.8% advance.
Higher gas prices accounted for the lion’s share of wholesale inflation in May. But the cost of steel, chicken, transportation, autos and parts also rose.
The increase in wholesale prices over the past 12 months slowed to 10.8% from 10.9%, the government said Tuesday. Just a year and a half ago, prices were rising at a less than 2% pace.
So-called core wholesale prices, which omit food and energy, rose 0.5% in May. Wall Street had expected a 0.5% increase.
High wholesale inflation suggests little relief any time soon for consumers. When companies have to pay more to operate their businesses, they usually pass the price increases onto customers.
The government on Friday said the cost of living rose sharply again in May and nudged the yearly rate of inflation to 8.6% from 8.3%. That’s the biggest outbreak of inflation since 1981.
Big picture: The poor results of the consumer price index in May killed any hopes on Wall Street that inflation would ease soon.
The Federal Reserve is now expected to raise interest rates even more rapidly than it had planned to try to contain inflation. Yet worries are growing that the central bank might drive the economy into recession by a more aggressive posture.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were set to open slightly higher in Tuesday trades. Stocks have fallen sharply in the past week over worries about high inflation and the prospect of a recession.