Wholesale Prices Jump Higher in May

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The high price of food and energy sent wholesale prices higher last month.

The Labor Department reported Tuesday that the Producer Price Index jumped 1.4 percent in May -- the fastest pace in six months.

That was up from a modest 0.2 percent rise in April and marked the biggest increase since November.

The PPI measures the cost of goods before they get to the store shelves.

There are fears that eventually these energy and food costs will force companies to boost prices for lots of other goods and services, spreading inflation through the economy.

Last week, the government reported that consumer prices leaped by 0.6 percent in May, the biggest increase in six months.

Meanwhile, corn prices rose to an all time high Monday -- $8 a bushel on some futures contracts. The price of corn has increased 11 percent in the last week alone.

Some analysts fear that the Midwest flooding will mean a significantly smaller U.S. corn crop and higher world food prices.

Farm Futures magazine estimates that floods could claim more than 3 million acres or nearly four percent of the corn crop.

The government is expected to release their report by the end of the month.

Source: The Associated Press

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