US wholesale inflation surged to 6 percent in April, marking the highest level since 2022, as escalating fuel and freight costs contributed to a sharp increase in producer prices, according to data from the Bureau of Labor Statistics. This figure represents a significant jump from a 4.3 percent year-on-year rise in March and 3.4 percent in February, prior to the escalation of conflict in the Middle East.

Economists had anticipated a more moderate increase, with projections averaging 4.8 percent, but the actual data underscored the broad impact of rising energy costs on the economy. Fuel prices have risen sharply following the outbreak of conflict linked to President Donald Trump’s actions in Iran, which contributed to supply disruptions and higher shipping expenses.

“The broad-based influence of energy is evident, as nearly every product involves some transportation cost, mostly reliant on diesel,” said Brett Ryan of Deutsche Bank. He suggested that rising energy costs could pose challenges for US consumers during the coming months.

The producer price index (PPI) often serves as an indicator of consumer inflation trends, which has already climbed to a three-year high of 3.8 percent in April. The current PPI level is comparable to the spike seen in December 2022, when the US economy was affected by the energy shock triggered by Russia’s invasion of Ukraine.

A key factor behind the inflationary pressure is the closure of the Strait of Hormuz, a critical maritime chokepoint responsible for about one-fifth of global oil shipments. This disruption has driven crude oil prices higher, with US gasoline prices rising over 50 percent to $4.51 per gallon and diesel prices reaching nearly $5.66 per gallon, approaching record highs.

The inflation data adds to the challenges facing Federal Reserve policymakers ahead of the transition in leadership with Kevin Warsh expected to take over as chair. Susan Collins, president of the Federal Reserve Bank of Boston, acknowledged the possibility of interest rate increases to curb inflation, citing the energy shock as a factor that has dampened economic growth prospects while pushing inflation risks upward.

Analysts noted that the ongoing conflict and associated supply constraints are likely to keep upward pressure on prices in the near term. Joseph Brusuelas of consulting firm RSM indicated that inflationary pressures remain “in the pipeline,” suggesting that it may take some time before inflation moderates.

Additional government data released indicated larger-than-expected reductions in crude oil and gasoline inventories last week, reflecting tightening supply conditions. Treasury yields, which often respond to inflation expectations, initially rose following the inflation report— with the 10-year yield reaching 4.5 percent and the 30-year yield hitting 5.06 percent—before retreating to 4.19 percent and 5.05 percent, respectively.