PPI shows strongest rise since 2022 as energy inflation surges

US wholesale inflation accelerated sharply in April, underscoring growing price pressures across the economy as higher energy costs and supply chain disruptions continued to ripple through businesses.

The Producer Price Index for final demand increased 1.4% in April on a seasonally adjusted basis, data released Wednesday by the US Bureau of Labor Statistics showed.

The reading marked the largest monthly rise in producer prices since March 2022.

Economists had expected a 0.5% monthly increase.

Final demand prices had risen 0.7% in March and 0.6% in February.

The annual increase in producer prices reached 6.0% in April, the largest year-on-year rise since December 2022, when the index climbed 6.4%.

The latest reading is likely to reinforce concerns that inflationary pressures are becoming more entrenched, complicating the Federal Reserve’s efforts to steer inflation back toward its 2% target.

Energy costs fuel wholesale inflation

Much of the increase was driven by energy-related costs amid disruptions to global trade routes linked to the ongoing US-Israeli conflict with Iran.

The conflict has affected shipping through the Strait of Hormuz, straining supply chains and contributing to shortages of key goods including fertilizers, aluminum and consumer products.

Prices for final demand goods climbed 2.0% in April after increasing 1.9% the previous month.

More than three-quarters of the increase was attributed to a 7.8% surge in energy prices.

Food prices also edged higher, while goods excluding food and energy rose 0.7%.

Services inflation also remained elevated.

The index for final demand services increased 1.2% in April, the largest gain since March 2022.

Nearly two-thirds of that increase came from a 2.7% jump in margins for final demand trade services.

Overall, nearly 60% of the rise in final demand prices was linked to higher services costs.

Core inflation pressures persist

Underlying inflation measures also strengthened in April.

The index for final demand excluding foods, energy and trade services rose 0.6%, matching the largest increase since October 2025.

On an annual basis, the measure climbed 4.4%, the strongest rise since February 2023.

The data follows a separate report earlier this week showing consumer prices also accelerated in April, with annual inflation posting its largest increase in three years.

The broadening inflation pressures are expected to keep the Federal Reserve cautious on monetary policy.

The US central bank left its benchmark overnight interest rate unchanged at 3.50% to 3.75% last month.

Before the producer price data, economists estimated core PCE inflation could rise by as much as 0.4% in April after increasing 0.3% in March.

Annual core PCE inflation is expected to accelerate to as high as 3.4%, up from 3.2% previously.

The latest inflation readings may further diminish expectations for near-term interest rate cuts as policymakers assess whether higher energy costs are feeding into broader and more persistent price pressures across the economy.