By Arlenys Tabare
According to data published this Wednesday by the Department of Labor, The producer price index in the United States increased 1.4% during the month of April, the largest monthly gain recorded since 2022, placing wholesale inflation at 6% year-on-year, the highest level in more than three years.
According to the report, The rise in producer prices occurs at a time of great economic tension with energy costs rising as the war in Iran unfolds, which has caused companies to begin passing the additional costs onto Americans’ bills.
The largest increases in inflation were observed in the services and goods sector; only between the month of March and April, Energy prices increased by 7.8% compared to 22.7% last year.
The cost of gasoline was the predominant part of the report; at the moment, Filling up can cost Americans more than $4.50 per gallon, which represents an increase of approximately 50% since the beginning of the conflict in the Middle East that caused the closure of the Strait of Hormuz.
For their part, basic food and energy prices increased 1% compared to the month of March and 5.2% since April of last year.
For Carl Weinberg, chief economist at High Frequency Economics, this latest report on both inflation and producer prices will set off alarm bells for the Federal Reserve and fuel the debate over affordability. “The results far exceed expectations, so this update will also sound alarm bells in the financial markets,” he told AP.
For his part, Ben Ayers, senior economist at Nationwide, noted that “The rebound in input prices portends further increases in consumer prices in May. “We anticipate that the most restrictive wing of the FOMC will advocate for a prolonged pause in interest rates, even as the new Federal Reserve Chairman, Kevin Warsh, will likely prefer to lower them over time,” he told Reuters.
This week, the Bureau of Labor Statistics (BLS) also released inflation data, indicating that the consumer price index rose 0.6% in April, placing interannual inflation at 3.8%.
Although many economists agree that the solution to high prices is to reach an agreement with Iran, since this will alleviate geopolitical tensions and restore confidence in the market.
This Tuesday, US President Donald Trump surprised with his statements by expressing that currently “Americans’ financial difficulties are not a key part of decision-making,” he said. ensuring that the only thing he thinks about is that “we cannot allow Iran to have a nuclear weapon.” That’s all. “That’s the only thing that motivates me,” he said.
Keep reading:
- US retail sales increased during the month of February, the largest increase since July 2025
- Economists from the Monetary Institution of The United States assure that the FED will not cut interest rates until the second half of 2027
- Job offers and hiring in the US were maintained before the impact of the war
- Analysis reveals that one in five retirees in the US is looking for work due to economic need
