Washington, DC – Today, the Bureau of Labor Statistics (BLS) released its monthly Producer Price Index (PPI) report, showing that wholesale inflation surged to 6% in April, the largest increase in over three years. The spike was driven by soaring energy costs tied to Republicans’ war in Iran. With businesses across the economy now facing sky-high transportation and supply chain costs on top of Republican tariffs, economists are warning that today’s numbers show costs will continue to increase for consumers.
The new report comes just one day after consumer inflation hit 3.8%, the highest level in nearly three years. It also follows President Trump’s declaration that “he does not consider the economic impacts the war in Iran is having on Americans,” as he and congressional Republicans continue to crush Americans with tariffs and cuts to programs like SNAP, Medicaid, and ACA tax credits.
“The news of the last 24 hours proves that the Republican war in Iran is wreaking havoc on working families and small businesses – but Republicans in Washington apparently don’t even factor it into decisions,” said Unrig Our Economy Spokesperson Kobie Christian. “When Republican policies force businesses to pay more for fuel, transportation, shipping, and supplies, working families foot the bill nearly everywhere they go, from the grocery store to the gas pump.”
NBC News: ‘Tabasco hot’: Prices for businesses spike, adding to growing inflation concerns
Key Points:
- The prices that businesses are paying for goods have risen sharply, according to data released Wednesday, the latest data point showing that knock-on effects from the Iran war are rapidly rippling across the economy.
- Wholesale business inflation surged to 6% in April on a yearly basis, according to data released by the Bureau of Labor Statistics, up from 4.3% in March.
- That data, known as the producer price index, or PPI, also found that business costs rose 1.4% in April on a monthly basis — almost three times more than had been expected.
- “The April increase is the largest advance since rising 1.7 percent in March 2022,” the agency said in a statement.
- Shipping traffic in the Strait of Hormuz remains largely frozen, choking off one of the world’s primary oil shipment corridors. Oil futures have remained elevated, while gas prices have jumped across the United States.
- Since the start of the war, oil and retail gas prices have surged more than 50%.
- Energy analysts have warned that this could mean high prices for months to come, costs that can be felt throughout the economy.
- The higher-than-expected wholesale inflation reading comes just one day after the consumer price index, which measures prices paid by consumers, rose to 3.8% from a year ago — its highest level in nearly three years and a rate that now outpaces wage growth.
- Wednesday’s report offers a variety of indications that energy inputs are pushing up prices for businesses throughout their supply chains. The PPI report does not measure the price that consumers pay, but it is sometimes viewed by economists as an early indicator of inflation. The soaring prices reported in the PPI data could be passed down in part to shoppers.
- Core PPI, which excludes often-volatile food and energy costs, also surged in April to 5.2%. That could indicate that energy inflation from the ongoing U.S.-Israeli war with Iran is bleeding into other categories.
- Services costs also rose the most since 2023, up 1.2% from March. Transportation and warehousing services jumped 3.4% from March to April, indicating the higher fuel costs may already be hitting businesses’ bottom lines.
- Wednesday’s reading was “Tabasco hot,” said Peter Boockvar, chief investment officer of One Point BFG Wealth Partners.
- “Not surprisingly, the nearly 16% rise in gasoline prices drove the rise in goods prices, followed by jet fuel, diesel fuel, fresh & dry vegetables, and industrial chemicals,” Boockvar added.
- “Bottom line, while more so supply shock driven…higher prices are higher prices to businesses and consumers as the economic pain feels the same,” he said.
To learn more about the campaign, visit UnrigOurEconomy.com or contact press@unrigoureconomy.com
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About Unrig Our Economy
Unrig Our Economy is a national campaign to fix the rules of our economy to make it work for working people. We know that when the middle class does well, all of us do well — which is why we’re fighting on behalf of working Americans and holding corporations, their wealthy executives, and the politicians who enable them accountable.