U.S. producer prices soared in May at their fastest pace in six months, a government report showed, led by higher energy and food prices.

Meanwhile, U.S. industrial production slumped for the second straight month in May as the country’s utilities posted a sharp drop in output.

Housing starts took another tumble last month as April’s surprise rise was revised lower.

The U.S. current-account deficit widened as expected in the first quarter.

The producer price index for finished goods rose 1.4% on a seasonally adjusted basis in May, the biggest rise since November, the U.S. Labour Department said today. They rose 7.2% compared to May 2007.

The core index, which excludes food and energy items, climbed 0.2% on the month and 3% from one year ago, matching the biggest annual increase since 1991.

Economists had expected a 1% increase in the overall index and 0.2% core rise.


Meanwhile, industrial production sank 0.2% last month, following an unrevised 0.7% decline in April, the U.S. Federal Reserve said.

Last month’s industrial capacity utilization fell 0.2 percentage point to 79.4% from the previous month’s revised 79.6% level. Utilization was 1.6 percentage points below its 1972-2007 average of 81.0%.

May’s industrial output was below Wall Street expectations. Economists had projected a 0.2% recovery in industrial production last month. The estimate forecast that capacity utilization held steady at April’s initial level of 79.7%.

Overall industrial production fell 0.1% from a year earlier, while manufacturing output decreased 0.3% from a year earlier.

Also today, the U.S. Commerce Department said housing starts fell 3.3% to a seasonally adjusted 975,000 annual rate. Meanwhile, April housing starts were revised to a rate of 1,008,000, representing a 2.0% climb over March. Initially, April housing starts were seen 8.2% above the March estimate.

Today’s data showed that building permits also dropped in May to a seasonally adjusted annual rate of 969,000. That’s 1.3% below the revised April rate of 982,000.

Economists had expected May starts to drop by 5.5% to a 975,000-unit annual rate.

Separately, the U.S. Commerce Dept. announced that the current account deficit widened in the first quarter.

The current account, which measures cross-border trade and investment as well as other international transactions, was in a $176.4 billion deficit for the January-March period, down from the revised US$167.2 billion deficit for the preceding three months, the Commerce Department said today. The fourth-quarter deficit was originally reported at US$172.9 billion.