U.S. producer prices rose more than forecast in May as a result of higher raw material costs including fuel and metals, which could lead to higher prices for consumers, reported Bloomberg News.

According to the U.S. Labor Department, prices paid to producers rose 0.9 percent last month after a 0.7 percent rise in April. Economists had forecast that the index would rise 0.6 percent. Compared with May 2006, producer prices were up 4.1 percent. Core prices, which exclude fuel and food costs, rose only 0.2 percent.

Energy prices had the biggest impact, with a 4.1 percent increase from the previous month. Meanwhile, food prices fell 0.2 percent as the cost of vegetables experienced the largest decline in five years. The cost of intermediate goods, used in early stages of production, rose 1.1 percent in May.

The Producer Price Index is one of three inflation gauges the federal government reports. Yesterday the Labor Department said that prices of imported goods rose more than forecast in May as a result of higher costs for oil and industrial supplies. Tomorrow, it will report the Consumer Price Index, which is expected to have risen 0.6 percent in May.