U.S. producer prices increased more than expected in April, posting their biggest gain since early 2022, the latest indication that inflation was accelerating amid the war with Iran.
The Producer Price Index for final demand surged 1.4% last month after an upwardly revised 0.7% advance in March, the Labor Department’s Bureau of Labor Statistics said on Wednesday.
In the 12 months through April, the PPI jumped 6.0%. That was the largest increase since December 2022 and followed a 4.0% rise in March. Part of the surge in the year-on-year PPI rate reflected last year’s low readings dropping out of the calculation.
The rise in inflation is becoming pervasive, posing a challenge for the Federal Reserve. The BLS reported on Tuesday that the Consumer Price Index rose further in April, with the annual inflation rate posting its largest gain in three years.
The U.S. central bank tracks the Personal Consumption Expenditures price indexes for its 2% inflation target.
Prior to the PPI report, economists estimated PCE inflation, excluding the volatile food and energy components, could rise by as much as 0.4% in April after gaining 0.3% in March. Estimates for the year-on-year increase in the so-called core PCE inflation were as high as 3.4%. It increased 3.2% in March.