Producer prices shot up 6% last month, adding to pressure on companies to raise prices for customers. U.S. wholesale inflation came in hot, with the Labor Department reporting Wednesday that its producer price index—which tracks inflation before it hits consumers—rose 1.4% in April, the biggest monthly gain since March 2022. The annual increase of 6% was the largest since December 2022, as the 10-week Iran war pushed up energy prices and put pressure on companies to pass along higher costs to consumers.
The numbers were much higher than economists had forecast. Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably measures of health care and financial services, flow into the Federal Reserve's preferred inflation gauge—the Commerce Department's personal consumption expenditures (PCE) price index.
On Tuesday, the Labor Department said that its closely watched consumer price index jumped 3.8% last month from April 2025—the biggest year-over-year increase in more than three years—as energy prices continued to climb. Prices are rising at a time when Americans are already frustrated by the high cost of living. Affordability is likely to be a key issue when voters go to the polls on November 3 to determine whether President Donald Trump's Republican Party maintains control of the U.S. Senate and House of Representatives.
