A worker uses a grinder on a metal door at a manufacturing facility in Sacramento, California.
Last month, wholesale inflation in the United States accelerated at the fastest pace since 2022 on a war-driven increase in energy prices that's feeding into higher freight transportation costs. The producer price index (PPI) rose 6 percent from a year ago, according to Bureau of Labor Statistics (BLS) data out today. That topped all estimates in a Bloomberg survey of economists.
The monthly gain was also the sharpest since 2022. And a core measure of wholesale inflation that excludes food and energy increased 5.2 percent from April 2025 to April 2026—the biggest advance in more than three years.
The inflation snapshot at the wholesale level follows yesterday's BLS data, which showed a steep annual increase in consumer prices. With a fragile truce in place with Iran and no end in sight for the Middle East conflict, other goods and services risk becoming more expensive as companies seek to pass on high energy and transportation costs.
The PPI data likely reinforces Federal Reserve officials' views that inflation should remain their top concern in the face of the war-driven surge in oil prices that's starting to ripple through to other parts of the economy.
"This report will set off alarm bells at the Fed and add fuel to the political conversation about affordability," Carl Weinberg, chief economist at High Frequency Economics, said in a note. "They suggest that energy price increases are indeed 'bleeding' into core prices at the producer level."
The PPI report showed goods prices, which include fuels, also increased by the most since 2022. Energy costs rose 7.8 percent in April following an even larger advance in the prior month.
| Metric | Actual | Estimate |
|---|---|---|
| PPI final demand (month-over-month) | +1.4% | +0.5% |
| PPI excluding food & energy (month-over-month) | +1.0% | +0.3% |
| PPI final demand (year-over-year) | +6.0% | +4.8% |
| PPI excluding food & energy (year-over-year) | +5.2% | +4.3% |
Services costs climbed 1.2 percent, the most in four years. Prices for transportation and warehousing services—a category forecasters had flagged as especially sensitive to the Iran conflict—jumped 5 percent, driven by trucking and higher margins at fuel retailers. The PPI report showed costs for truck transportation of freight jumped 8.1 percent—the most in data back to 2009. Margins for machinery and equipment wholesalers also climbed substantially.
Several components of the PPI are of particular interest because they feed into the the Fed's preferred inflation gauge, the personal consumption expenditures (PCE) price index.
Those categories were mixed in April. While airfares and healthcare costs rose, portfolio management fees declined. The Bureau of Economic Analysis (BEA) is scheduled to release April PCE price data, along with income and spending figures, on May 28.
While the labor market is showing some momentum, consumer sentiment now stands at record lows and inflation-adjusted wages are falling, which could put a dent in household spending—and, therefore, economic growth—later this year. Fed officials have indicated that the central bank is unlikely to reduce interest rates in the near future.
Another PPI measure pointed to persistent inflation pressures earlier in the production process. The costs of processed goods for intermediate demand increased 5.6 percent in the past two months, the largest such advance in five years. Even excluding food and energy, prices of processed goods accelerated in April.
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