In May, the BLS's import price index rose 6.7% from a year earlier, adding further proof of the inflationary impact of the Iran war and the data center boom.

Last month, the PPI increased 6.5% from May 2025 and 1.1% from April 2026.

Fed officials are widely expected to hold rates steady this month, but investors expect the Fed to raise rates by the end of the year in response to higher inflation.

Non-farm U.S. payrolls grew by 172,000 last month, while unemployment held steady at 4.3%.

Revised expectations push the next Fed interest rate cut out farther.

The PPI data reinforces Federal Reserve officials' views that inflation should remain their top concern in the face of the war-driven surge in oil prices.

The labor market seems to be holding up despite rising energy costs, reducing pressure on the Fed to lower interest rates.

Faster growth at the beginning of this year reflects hyperscalers' massive investments in AI.