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U.S. Wholesale Prices Rose 6% in April After Iran Conflict Began
The producer price index climbed 1.4% for the month, nearly three times the expected pace, the Bureau of Labor Statistics reported. Energy costs drove much of the increase as oil and gasoline prices surged more than 50% since the start of the conflict. The data follows a rise in the consumer price index to 3.8% from a year earlier.
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The prices that businesses are paying for goods have risen sharply, according to data released Wednesday, showing the effects from the Iran war are spreading through the economy. Wholesale business inflation surged to 6% in April on a yearly basis, according to data released by the Bureau of Labor Statistics, up from 4.3% in March.
That data, known as the producer price index, or PPI, also found that business costs rose 1.4% in April on a monthly basis, almost three times more than had been expected. The April increase is the largest advance since rising 1.7 percent in March 2022, the agency said in a statement.
Shipping traffic in the Strait of Hormuz remains largely frozen, choking off one of the world’s primary oil shipment corridors. Oil futures have remained elevated while gas prices have jumped across the United States. Since the start of the war, oil and retail gas prices have surged more than 50%.
The higher-than-expected wholesale inflation reading comes one day after the consumer price index, which measures prices paid by consumers, rose to 3.8% from a year ago, its highest level in nearly three years. Energy accounted for the majority of the rise in that index.
Wednesday’s report offers indications that energy inputs are pushing up prices for businesses throughout their supply chains. The PPI report does not measure the price that consumers pay but is sometimes viewed by economists as an early indicator of inflation.
The soaring prices reported in the PPI data could be passed down in part to shoppers. Core PPI, which excludes often-volatile food and energy costs, also surged in April to 5.2%. That could indicate that energy inflation from the ongoing U.S.-Israeli war with Iran is bleeding into other categories.
