U.S. producer prices recorded the fastest increase in 11 years in May as inflation readings continued to soar in the U.S. economy.
The Labor Department reported on Tuesday that producer inflation data was strong in May with an increase of 6.6% per year. This increase is the largest increase since the data in November 2010.
On a monthly basis, the producer index has risen by 0.8% per month compared to analysts ’forecasts which target growth of only 0.6%
Based on the data, this higher price pressure came amid a 1.3% drop in retail sales in May, a much worse figure than the target estimate of just 0.6%.
Goods inflation became the dominant force of inflation, rising 1.5% over the increase in services. The spread of the pandemic has limited consumer demand for services.
Federal Reserve officials believe the current increase is temporary due to unbalanced supply and demand problems and low readings due to restrictive measures.
However, several well -known Wall Street names, including Bank of America CEOs Brian Moynihan and Paul Tudor Jones stated that it was time for the Fed to make changes to the policies it implemented.
On the other hand, retail sales excluding automotive fell by 0.7% in May. The US index registered a slight strengthening of 0.04% to 90.532 against major currencies.
