US PPI Seen Cooling Monthly, Heating Up Annually

US producer prices likely increased by 0.7% month-over-month in May 2026, following a 1.4% surge in April which was the largest monthly gain since March 2022. Energy prices are expected to remain a major driver of inflation, particularly gasoline and jet fuel, as the ongoing conflict with Iran continues to disrupt oil supplies and push crude prices sharply higher. Core producer prices, which exclude the more volatile food and energy components, are forecast to rise by 0.5% in May, moderating from the 1% increase recorded in April. On an annual basis however, headline producer inflation is projected to accelerate for a fourth consecutive month to 6.4%, up from 6% in April and marking its highest level since December 2022. Meanwhile, annual core producer inflation is expected to edge up to 5.4% from 5.2%, also reaching its highest reading since December 2022.

Producer prices in the US soared 1.4% month-over-month in April 2026, the biggest increase since March 2022, following an upwardly revised 0.7% gain in March and well above forecasts of 0.5%. Prices of goods jumped 2%, led by a 15.6% surge in gasoline as war in Iran continued to drive cost of oil higher. Prices for jet fuel, diesel fuel, fresh and dry vegetables, industrial chemicals, and residual fuels also rose. Prices of services went up 1.2%, the most since March 2022, led by a 3.5% increase in margins for machinery and equipment wholesaling. Cost also went up for truck transportation of freight; fuels and lubricants retailing; health, beauty, and optical goods retailing; chemicals and allied products wholesaling; and legal services. Year-on-year, producer prices jumped 6%, the biggest increase since December 2022, following an upwardly revised 4.3% rise in the previous month and above forecasts of 4.9%.

US producer prices are expected to increase by 0.5% month-on-month in April 2026, matching the pace recorded in both February and March, as energy costs continue to face upward pressure amid the ongoing conflict with Iran. Core producer prices, which exclude the volatile food and energy components, are forecast to rise 0.3%, following a more modest 0.1% increase in the previous month. On an annual basis, headline producer inflation is projected to accelerate sharply to 4.9%, marking a third consecutive monthly increase and reaching its highest level since January 2023, up from 4.0% in March. At the same time, the annual core producer inflation rate is expected to climb to 4.3% from 3.8% in both February and March, which would represent its highest reading since February 2023.