The May 2026 Producer Price Index showed energy prices rising 10.7% month-on-month and goods prices recording the largest single-month advance since the data series began in December 2009, signalling that the commodity market disruption from the Iran war extends well beyond crude oil into adjacent raw material markets.

Key Highlights

  • Goods PPI up 2.8% MoM, a record monthly gain: Final demand goods prices rose 2.8% in May, the largest single-month increase since the goods PPI data series began in December 2009, driven primarily by energy but extending across industrial inputs.
  • Energy prices up 10.7% MoM: Energy in the PPI final demand basket rose 10.7% in May, with gasoline surging 23.4%, diesel fuel, jet fuel, plastic resins, industrial chemicals, and natural gas liquids all rising.
  • Unprocessed intermediate goods up 4.9% MoM: Unprocessed goods for intermediate demand, a leading indicator of commodity cost pressure still working through the supply chain, rose 4.9% for the month, pushing the 12-month gain to 22.2%, the highest since September 2022.
  • Processed intermediate goods up 3.5%: Processed goods for intermediate demand rose 3.5%, with a 12-month increase of 13.3%, the largest since August 2022.

The May 2026 PPI report is not simply an energy story. While the 10.7% month-on-month rise in energy prices was the dominant driver, the data reveals that commodity market disruption from the Iran war is now embedded across a broad range of industrial inputs, from petrochemical feedstocks to transport fuels, in a pattern that closely resembles the commodity cascade seen in 2022 following Russia's invasion of Ukraine.

The 2.8% monthly rise in final demand goods prices was the largest recorded since the Bureau of Labor Statistics began tracking the series in December 2009. The breadth of the increase extended beyond gasoline, encompassing diesel fuel, jet fuel, plastic resins and materials, industrial chemicals, and natural gas liquids, all of which are directly linked to crude oil and natural gas pricing. These are inputs that permeate manufacturing, agriculture, construction, and logistics.

The most forward-looking signal in the data is the behaviour of intermediate demand goods. Unprocessed goods for intermediate demand, which capture raw material costs at the earliest stages of production, rose 4.9% in May, pushing the 12-month gain to 22.2%, the highest since September 2022. Processed intermediate goods rose 3.5% for the month, with their 12-month increase reaching 13.3%. Stage 1 intermediate demand, the first step in the production pipeline, rose 3.2% in May, its largest monthly advance since the series began in December 2009. The drivers at this early stage included industrial chemicals, diesel fuel, gasoline, and aluminum base scrap.

The World Bank has flagged fertilizer prices as a separate concern, with prices expected to surge approximately 38% in 2026, and aluminum supply is also under pressure from energy-intensive smelting costs rising across Europe and Asia.