May PPI: biggest yearly jump since late 2008

WASHINGTON (Reuters) - Producer prices rose more than expected in May but the pace of increases eased from prior months as the climb in energy costs slowed, according a report on Tuesday.

The Labor Department said producer prices climbed 0.2 percent, double what analyst forecasts in a Reuters poll but down from April's 0.8 percent increase. Compared to a year earlier, prices surged 7.3 percent, the largest rise since September 2008, just as the financial crisis took a turn for the worse and dragged prices lower globally.

Excluding food and energy, wholesale prices jumped 0.2 percent, while year-on-year core inflation remained at 2.1 percent, its highest since August 2009.

(Reporting by Pedro Nicolaci da Costa; Editing by Padraic Cassidy)