Wholesale prices rose at the highest annual rate in over three years, the government said Wednesday in another sign of stubborn inflation.
The Bureau of Labor Statistics said the producer price index rose 6% for the year ending in April, “the largest 12-month increase since moving up 6.4% in December 2022.”
The PPI measures what domestic producers receive for their products and is considered a leading indicator of inflation.
The index rose 1.4% for the month of April, the largest one-month advance since March 2022.
The report follows a Tuesday release that showed consumer prices rising at an accelerating pace. Taken together, the reports show inflation remains a worry after President Trump campaigned on lowering costs – and as he weathers complaints that the war on Iran is raising oil and gas costs.
Bureau analysts said three-quarters of the PPI increase can be traced to a large jump in energy prices.
However, the price increases are broad-based and may be attributable to factors beyond the war. For instance, wholesale prices for machinery and equipment were up, alongside health and beauty goods and legal services.
Mr. Trump says prices will come down once the conflict with Iran is over. He says the short-term pain is worth the goal of preventing Iran from having a nuclear weapon.
“As soon as this war is over, which will not be long, you’re going to see oil prices drop and you’re going to see the stock market, which is already at the highest point in history, go through the roof,” he said Tuesday. “You’re going to see the golden age of America.”
Democrats, meanwhile, say Mr. Trump engaged in a “war of choice” that is resulting in pain at the gas pump.
The average U.S. price of a gallon of gas stood at $4.51 on Wednesday, a 51% increase from the start of the war on Feb. 28, according to the AAA motor club.
The conflict between the U.S. and Iran has morphed from a kinetic war to a battle of economic will.
Iran is clamping down on traffic through the Strait of Hormuz, a chokepoint for oil and other goods, resulting in energy shortfalls and higher prices around the world.
Tehran, however, is buckling under Mr. Trump’s blockade of maritime ports.
Iran is struggling to export oil for critical revenue, its currency is falling and layoffs are rampant.
Iranian President Masoud Pezeshkian urged the agriculture ministry on Wednesday “to employ their full capacity to control prices.”
“Our duty is to stand by the people with all our being,” Mr. Pezeshkian posted on X.
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