The increase in prices was largely attributed to a 0.4% rise in prices for light trucks. Food and energy prices also contributed. Food prices rose 0.6%, driven primarily by a 41% surge in egg prices. Meanwhile, gas prices rose 1.5% in May following a 6.0% decline in April, helping to push up energy prices by 1.3%.
While less benign than the import price report, the fact that core producer inflation remains well contained and is still trending downward (chart 2) will ease any inflationary concerns the Fed may have, suggesting business as usual for monetary policy. Still, the markets eagerly await Bernanke's comments at next week's FOMC meeting.