A jack-up rig in the Caspian sea.
WASHINGTON - A jump in fuel prices drove US wholesale inflation in May to its highest level in more than six years, signalling inflation may continue to rise, according to government data Wednesday.
Meanwhile, wholesale prices for US-milled steel had the biggest monthly increase in seven years, a sign the steep metal tariffs President Donald Trump imposed in March may already be feeding into inflation.
The latest report echoed the Labor Department&39;s consumer inflation figures released Tuesday which likewise hit a six-year high due to rising energy costs.
In a tweet prior to the data release, Trump accused OPEC of driving up crude prices.
"Oil prices are too high, OPEC is at it again. Not good!," Trump said on Twitter.
The inflation data comes as the Federal Reserve later Wednesday is widely expected to announce the second increase in benchmark lending rate this year. The central bank watches price data closely and has been raising interest rates gradually to head off inflation which economists expect will begin rising this year after a lengthy period of weakness.
The Producer Price Index, which tracks wholesale costs for goods, services and construction, spiked 0.5 percent in May compared to the prior month, two tenths faster than economists were expecting and the biggest increase in five months.
Compared to May of last year, however, PPI increased 3.1 percent, the biggest gain since January 2012.
Most of the month&39;s increase was due to rising goods prices, including a 4.6 percent jump in the energy index, the biggest in three years.
Fuel prices gained 9.8 percent, while jet fuel surged 15.8 percent - the largest in two years - and diesel prices increased 6.5 percent, which likely will squeeze already hard-pressed trucking service providers.
Excluding volatile food, fuel and trade services "core" PPI rose a token 0.1 percent. But within the core category was a 4.3 percent increase in prices for steel mill products, the largest increase since February 2011.