Prices paid to US producers surged by an annual 6pc in April, the biggest gain since December 2022, spurred by rising energy costs triggered by the Mideast Gulf war.
The producer price index (PPI) gained from an upwardly revised 4.3pc in March, according to the Bureau of Labor Statistics. Prices rose by 3.4pc in February and by 3.1pc in January and were at 2.4pc in April last year.
The PPI report comes one day after BLS reported that the consumer price index rose by an annual 3.7pc in April, the biggest gain in nearly three years. The PPI report shows more inflation is in the pipeline, triggered by the Mideast Gulf war that started on 28 February.
"Stickier core inflation from AI buildout, passthrough from the oil price shock, and lingering tariff effects will keep the Federal Reserve at bay for most of 2026," Oxford Economics said in a note. "Eventually, we expect higher energy prices will feed through to weaker consumer spending and a softer labor market, prompting the Fed to deliver its next rate cut in December."
Prices for energy rose by 22.7pc in April from a year prior following 11.2pc originally reported the prior month, BLS said. Energy for export rose by 50pc after an 18.6pc gain.
Core producer prices, excluding volatile energy and food, rose by 5.2pc in April after a 3.8pc gain the prior month.
Prices for goods rose by an annual 7.4pc in April, led by gasoline, compared with 4.9pc originally reported the prior month
Services rose by 5.5pc, partly led by margins for trade services, after a gain of 3.7pc.
Food rose by 2.2pc in April after a 1.6pc gain the prior month.
Transport and warehousing services rose by 12.2pc after a 6.1pc gain the prior month. Transportation of passengers rose by 11pc after a 7.5pc gain in March.
On a monthly basis, seasonally adjusted PPI rose by 1.4pc in April following a 0.7pc monthly gain in March and 0.6pc gains each of the prior two months.
