Wholesale Inflation Jumps Most Since 2022 on Hormuz Conflict

U.S. wholesale inflation surged in April, with the Producer Price Index jumping 1.4 percent for its biggest monthly gain since March 2022, as the ongoing U.S.-Israeli war with Iran disrupted shipping through the Strait of Hormuz and drove up energy costs across global supply chains. The year-over-year PPI rose 6.0 percent, the largest increase since December 2022, according to data released Wednesday by the Labor Department's Bureau of Labor Statistics. Economists had forecast a much more modest 0.5 percent monthly gain, highlighting how the conflict has upended expectations for gradual disinflation. The surge in producer prices comes just a day after the BLS reported that the Consumer Price Index climbed 3.8 percent from April 2025, the biggest year-over-year increase in more than three years, as energy prices continued climbing. Wholesale prices for goods rose 2.0 percent in April, with energy prices alone surging 7.8 percent, while services prices increased 1.2 percent, accounting for nearly 60 percent of the overall PPI gain. The conflict has caused shortages across a wide range of goods including fertilizers, aluminum and consumer products. The acceleration in inflation poses a challenge for the Federal Reserve, which tracks the Personal Consumption Expenditures price index for its 2 percent inflation target. The central bank left its benchmark overnight interest rate unchanged last month in the 3.50-3.75 percent range. Core PCE inflation, excluding volatile food and energy components, was estimated by economists to have risen as high as 3.4 percent in April. The high cost of living has become a key concern for American consumers, with affordability expected to be a pivotal issue in the November 3 congressional elections.