Wholesale prices climbed sharply in April as energy costs and service-sector increases intensified inflation concerns and fueled expectations of possible future interest-rate hikes.
By yourNEWS Media Newsroom
Wholesale inflation in the United States accelerated sharply in April, marking the largest monthly increase in producer prices since March 2022 and signaling renewed inflationary pressures across the economy.
According to newly released data from the Bureau of Labor Statistics, the producer price index (PPI)—which measures prices businesses pay for goods and services—rose 1.4% in April following an upwardly revised 0.7% increase in March.
Economists had expected a smaller increase of roughly 0.5%.
On a year-over-year basis, wholesale inflation climbed to 6%, the highest level since December 2022 and well above market expectations. The annual figure also rose sharply from the revised 4.3% reading recorded in March.
The report showed that nearly 60% of the increase came from higher prices in the services sector.
Transportation, warehousing, and trade services accounted for much of the increase, while machinery and equipment wholesaling margins rose 3.5%, according to the labor bureau.
Goods prices also jumped 2% during the month, largely driven by surging energy costs. Gasoline prices alone increased nearly 16% in April, accounting for more than 40% of the broader rise in energy prices.
The inflation surge comes as the continuing Iran conflict and ongoing disruptions around the Strait of Hormuz continue to pressure global energy markets.
The Strait of Hormuz handles roughly one-fifth of the world’s oil supply, and military tensions in the region have pushed crude oil prices above $100 per barrel.
National gasoline prices have climbed above $4.50 per gallon in many areas, while diesel prices remain above $5 per gallon.
Businesses facing higher transportation and fuel expenses may increasingly pass those costs on to consumers.
Underlying inflation measures also accelerated.
Core producer inflation—which excludes volatile food and energy categories—rose 1% in April after increasing just 0.2% in March. Economists had projected a 0.3% increase.
The annual core producer inflation rate climbed to 5.2%, up from 4% the prior month.
A separate measure excluding food, energy, and trade services rose 0.6% month-over-month and reached 4.4% annually.
The latest figures followed new consumer inflation data released by the Bureau of Labor Statistics showing the consumer price index climbed to 3.8% annually in April, the highest level in nearly three years.
Core consumer inflation also increased to 2.8%.
Tom Essaye said the key concern is whether higher energy and commodity prices begin feeding more broadly into the economy.
“If the energy shock is filtering through the marketplace, it could intensify stagflation fears,” Essaye said in comments cited by The Epoch Times.
The possibility of stagflation—a combination of slowing economic growth, elevated inflation, and rising unemployment—has increasingly entered economic discussions as energy prices remain elevated.
Financial markets have also begun adjusting expectations for future Federal Reserve policy.
According to CME Group FedWatch futures data, investors now see roughly a 50% probability of at least one quarter-point Federal Reserve interest-rate increase by March 2027.
Treasury yields rose following the inflation data release. The benchmark 10-year Treasury yield climbed to 4.48%, its highest level since July, while 20-year and 30-year Treasury yields moved above 5%.
The Federal Reserve’s next policy meeting is scheduled for June 16–17.
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