By Matt Grossman
Wholesale inflation reached its highest 12-month rate in three years last month, the Labor Department said Tuesday, a sign of how the oil shock from the war in Iran lifted prices charged by businesses.
The producer-price index rose by 0.5% in March, the same as in February. That yielded 12-month PPI inflation of 4%, the greatest since February 2023. Analysts polled by The Wall Street Journal were expecting a 1.1% increase on month.
March price increases were lifted by an 8.5% increase in energy costs. Wholesale inflation tends to be more volatile than the consumer-price index, which also accelerated in March as Americans paid more for gasoline and diesel.
Economists will be studying Tuesday's numbers carefully in order to refine their estimates for what the Fed's preferred inflation gauge will show in its March reading. The personal-consumption expenditures price index, which is largely based on data from the CPI and PPI, will be updated on April 30.
Rising inflation may strain the budgets of Americans who have already faced price increases above the Fed's 2% annual target for the past five years. It also means a new economic challenge for the central bank, which is simultaneously contending with a slowing labor market.
Since the war began, traders in financial markets have mostly bet against further interest-rate cuts this year, a shift from positions earlier this year that showed one or two quarter-point rate cuts were seen as likely.
Write to Mat Grossman at matt.grossman@wsj.com
(END) Dow Jones Newswires
04-14-26 0901ET
