Wholesale Inflation Drops in May 2025 as Gasoline Prices Plunge
In May 2025, wholesale inflation decreased more than experts predicted, driven largely by a significant fall in gasoline prices, signaling easing inflation pressures.
Bill McColl brings over 25 years of expertise as a senior producer and writer across TV, radio, and digital platforms, leading teams to deliver impactful news coverage on major events.
Highlights
- The Producer Price Index (PPI) declined more than expected in May 2024.
- A sharp 13.8% drop in gasoline prices was the main factor behind the 1.6% decrease in goods prices.
- This data aligns with the Consumer Price Index report released earlier, which also indicated a slowdown in inflation.
Wholesale prices experienced a notable decline last month, reaching their lowest year-over-year inflation rate since December 2020, underscoring a cooling inflation trend.
The U.S. Labor Department revealed that the Producer Price Index (PPI) fell by 0.3% in May 2024, surpassing economists' forecasts. The annual inflation rate stood at 1.1%, below expectations. Excluding volatile food, energy, and trade service prices, the PPI remained flat for the month and increased 2.8% year-over-year.
Goods prices dropped by 1.6%, with the majority of this decrease driven by a 13.8% plunge in gasoline costs. Food prices also saw a 1.3% decline.
Service prices edged up by 0.2%, largely influenced by a 4.2% increase in retail margins for automobiles and auto parts, which accounted for over 40% of the rise.
Just one day prior, the government reported that consumer prices in May rose at the slowest annual pace in more than two years, reinforcing the trend of easing inflation.
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