In May, US producer prices rose by 0.2% M/M the rate of increase since July last year, while on an annual basis, producer prices rose at the sharpest pace (7.3% Y/Y) since September 2008. Prices of gasoline (2.7% M/M) continued to rise sharply and also prices of residential electricity (0.9% M/M) and passenger cars (0.5% M/M) increased significantly in May. Food prices on the contrary dropped by 1.4% M/M. While finished (0.2% M/M) and intermediate (0.9% M/M) PPI continued to rise, crude PPI dropped significantly (-4.1% M/M) in May. The decline in gasoline prices came probably too late to affect the May PPI data as the survey is conducted in the second week of the month, therefore a decline in gasoline prices might come in June.