Producer prices surge 6.6% annually, most on record

BMO Capital Markets Chief Strategist Brian Belski discusses the effect of reopening on the economy, arguing Americans are figuring out new ways to spend money.

Producer prices rose in May by the most on record as the reopening of the U.S. economy from COVID-19 lockdowns gathered momentum.

The producer price index for final demand last month increased at a 6.6% annual pace, quickening from last month’s 6.2% gain, the Labor Department said. The annual reading for May was the hottest since recordkeeping began in November 2010.     

The annual data has a “base effects” skew as a result of the price decline that occurred at the beginning of the pandemic.

INFLATION EXPECTATIONS FOR NEXT YEAR SURGE TO RECORD HIGH

On a monthly basis, prices rose 0.8%, quickening from last month’s 0.6% increase. 

Analysts surveyed by Refinitiv had expected prices to increase 6.3% from a year ago and 0.6% month over month. 

Almost 60% of the increase was due to the…

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