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Producer prices climb 6.6% in May on annual basis, largest 12-month increase on record

Producer prices rose at their fastest annual clip in nearly 11 years in May as inflation continued to build in the U.S. economy, the Labor Department reported Tuesday.

The 6.6% surge was the biggest 12-month rise in the final demand index since the Bureau of Labor Statistics began tracking the data point in November 2010.

On a monthly basis, the producer price index for final demand rose 0.8%, ahead of the Dow Jones estimate of 0.6%.

Those higher price pressures came amid a pronounced dip in retail sales, which fell 1.3% in May, worse than the 0.6% estimate, according to the Census Bureau.

Goods inflation continued to be the dominant inflation force, rising 1.5% as opposed to a 0.6% increase in services. In the pandemic economy, goods have run well ahead of services as economic lockdowns constrained consumer demand for services-related purchases.

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