Companies passed more of their rising costs to wholesale buyers last month, the government reported yesterday, adding to concerns that the Federal Reserve will raise interest rates briskly this year to keep consumer price inflation under control.

Producer prices rose 0.8 percent in May, on a seasonally adjusted basis, the most of any month in more than a year, according to the Labor Department's producer price index. The PPI measures changes in prices paid to producers for finished goods that are later sold by retailers, typically at a higher price, to consumers.

The May figure followed increases of 0.7 percent in April and 0.5 percent in March. The PPI rose 5 percent in the 12 months that ended May 31, the fastest such rise since December 1990 and an acceleration from the 3.7 percent increase in the 12 months that ended April 30.

Much of the May increase was driven by higher food and energy prices, which rose 1.5 percent and 1.6 percent, respectively. Excluding those items, the core PPI rose a more moderate 0.3 percent, reflecting higher prices for items such as cars, light trucks, pet food and household furniture.

The May PPI report contrasts with those from earlier this year, when companies were paying sharply higher prices for raw materials -- particularly for oil, gas and metals -- but had to eat those extra expenses because they had little power to pass those costs on to their business customers.

In May, companies were able to raise prices much faster at each stage of the production pipeline. Prices rose 2.8 percent for crude goods, such as grain, crude oil, raw cotton and metals, that are intended for further processing and not ready for sale to consumers. Prices rose 1.1 percent for "intermediate goods," such as flour, cotton yarn and steel, which are used in the production of finished goods. Both figures fell from April, but remained well above the rates in March and February.

The big question for Fed officials is how fast they will have to raise interest rates this year to prevent companies from raising consumer prices so much that inflation takes off.

"The May producer price report showed larger and more broad-based price pressures than expected . . . renewing concerns about" how quickly the Fed will raise rates over the rest of the year, Peter E. Kretzmer, senior economist with Banc of America Securities, wrote in a note to clients. "Not only have cost pressures increased, but the ability of businesses to pass these increases through to finished goods is better than has been seen for most of the past decade."

The financial-market reaction to the price report was muted.

Fed officials have signaled that they will raise the target for their benchmark overnight interest rate at their next policymaking meeting, June 29 and 30.

Analysts widely believe that the central bank will raise the target to 1.25 percent from 1 percent, in large part because Fed Chairman Alan Greenspan reiterated Tuesday that he and his colleagues believe they can raise the target at a "measured," or gradual, pace because they believe "inflationary pressures are not likely to be a serious concern in the period ahead."

Greenspan and other Fed officials have argued that much of the recent increases in raw materials prices are temporary, and that companies' fat profit margins will enable them to absorb most of their rising costs rather than pass them on to consumers. Greenspan also has said that global competition should force many companies to hold consumer prices steady rather than risk losing market share.

But the strengthening economy has already allowed many truckers, freight railroads, hotels, restaurants and even ice-cream vendors to raise consumer prices in the past eight weeks, according to a Fed survey released Wednesday.

And Greenspan stressed Tuesday that if the Fed's forecasts turn out to be wrong, the central bank will act accordingly.

Some analysts said yesterday that the PPI report, combined with the 0.6 percent increase in the consumer price index last month, indicate that rising inflation pressures may force the Fed to raise its target in bigger and more frequent steps than implied by a "measured pace."

"Let's be clear: We do not think we are on the brink of runaway inflation," said Dana A. Saportaof Stone & McCarthy Research Associates. "However, we find it overly sanguine to argue that inflation pressures [are] not building in the economy. The pipeline PPI indices show that inflation certainly can be a problem if not addressed preemptively" by Fed action to raise interest rates.

Saporta is among several analysts who believe that the Fed may follow a quarter-percentage-point rate increase this month with a half-point increase at the next scheduled policymaking meeting, in August.

The cost of new cars to retailers is part of the government's producer price index, which rose 0.8 percent in May.