Key takeaways
- The US PPI jumped 6% year-on-year in April 2026, the largest increase since December 2022, largely driven by energy costs.
- Gasoline prices rose 15.6% and energy prices rose 7.8%, both directly linked to disruptions in the Strait of Hormuz due to the war between the United States, Israel and Iran.
- Trump told reporters that Americans’ financial woes are “not even a little bit” a factor in his push for a nuclear deal with Iran.
Gasoline prices jump 15.6% in April as Iran war drives worst U.S. wholesale sales Inflation in 3 years
The Bureau of Labor Statistics released the April Producer Price Index on Wednesday, May 13. Economists forecast an annual gain of 4.9%. The final impression was more than a percentage point higher than this estimate.
On a monthly basis, final demand PPI increased by 1.4% on a seasonally adjusted basis. This is the largest one-month gain since March 2022, when the index rose 1.7%. This figure follows gains of 0.7% in March and 0.6% in February.
Energy prices dominated the headlines. Final demand goods increased 2.0% for the month, with the energy component increasing 7.8%. Gasoline prices alone rose 15.6%. Jet fuel, diesel and industrial chemicals also saw notable gains.
Nearly 60% of the monthly advance came from services. Final demand services rose 1.2%, their largest increase since March 2022. Transportation and warehousing costs jumped 5.0%. Wholesale machinery and equipment margins increased by 3.5%.
The core PPI, which excludes food, energy and business services, rose 0.6% on the month and 4.4% year on year. This annual base figure is the highest since February 2023.
The main factor behind the energy clash is the U.S.-Israeli war against Iran, which began on February 28, 2026. U.S. and Israeli strikes on Iranian targets triggered retaliation and led Iran to largely blockade the Strait of Hormuz, a chokepoint for an estimated 20 to 25 percent of the world’s maritime oil and liquefied natural resources. gas. Brent crude remained above $100 per barrel, or nearly $104 at the start of May.
A fragile ceasefire concluded in early April remains in force but unstable, which keeps energy markets tense. Analysts say April’s PPI index would have been close to consensus forecasts without the war-induced oil shock.
When reporters asked President Trump to what extent Americans’ financial woes due to rising gas prices and inflation factored into his pursuit of a deal with Iran, he was blunt. “I don’t think about the financial situation of the American people,” Trump remarked. “I don’t think of anyone. I think of one thing: we cannot let Iran have nuclear weapons.”
He added that household cost pressures were “not even a tiny bit” motivating factor. Trump separately described the U.S. economy as “roaring” and predicted that a lasting resolution to the Iran conflict would bring down oil prices and produce a rapid economic rebound.
Markets reacted to the PPI data with a decline in stocks and a rise in Treasury yields, but a chip rally kept the Nasdaq higher. It is now more likely that the Federal Reserve will delay rate cuts or adopt tighter policy if inflationary pressures persist.
The PPI is a leading indicator of wholesale price pressures that may pass through to consumer prices. The April Consumer Price Index (CPI), released separately yesterday, stood at around 3.8% year-on-year. A sustainable reopening of the Strait of Hormuz would likely reduce energy costs and reduce inflation throughout the supply chain.
