US wholesale inflation accelerated in August, reflecting higher energy prices amid ongoing Middle East tensions, government data showed Thursday. The Labor Department reported that the Producer Price Index (PPI), which measures inflation at the wholesale level before it reaches consumers, rose 5.4 percent over the past year, up from 4.8 percent in July. On a monthly basis, wholesale prices increased 0.4 percent from July to August, marking a faster pace than the previous month’s 0.1 percent rise.

The increase in energy costs was a major contributor to the uptick. Diesel prices surged 24.1 percent in August alone and have climbed nearly 78 percent compared to a year earlier. Diesel fuel plays a critical role in shipping and transportation, and the sharp rise in its cost is likely adding pressure to the prices of goods such as groceries, clothing, and manufactured products. Overall energy prices rose 4.2 percent for the month, driven notably by the spike in diesel.

Oil prices in the United States surpassed $100 per barrel on Thursday, influenced by renewed fighting in the Middle East. Since late February, following US and Israeli strikes against Iran, which led Tehran to threaten the closure of the Strait of Hormuz, gasoline prices have increased about 44 percent, while diesel has jumped 59 percent. These developments have contributed to sustained inflation pressures amid a complex geopolitical backdrop.

Core producer prices, which exclude the more volatile food and energy sectors, rose 0.2 percent month-over-month in August, the same rate as in July. Over the past year, core prices climbed 4.6 percent, up from 4.2 percent previously. In addition to fuel, other sectors showing price increases included airfares, which rose 4.2 percent last month, hospital care, and electronic components, the latter being influenced by increased spending on artificial intelligence data centers. Food prices edged up by only 0.1 percent, possibly signaling some stabilization in grocery costs, while electric utility prices declined.

The August inflation data will be closely examined ahead of the Federal Reserve’s upcoming policy meeting, as it could influence the central bank’s decision on whether to raise short-term interest rates. The Fed’s preferred inflation gauge, based largely on similar data, is scheduled for release on September 30. Some Federal Reserve officials have indicated they might hike rates if inflation remains elevated, while others have suggested holding steady if price increases show signs of cooling.

President Donald Trump, addressing rising oil prices, publicly predicted that oil costs would not fall before the US midterm elections on November 6, but asserted they would decline sharply afterward. The Trump administration faces political pressure as inflation affects consumer expenses, including fuel, groceries, and other essentials.

Economists emphasize the importance of distinguishing whether inflation is driven mainly by temporary factors such as energy prices or if broader price increases continue to spread across the economy. More than half of the nearly 200 categories tracked for price changes have experienced increases exceeding 3 percent over the past year, a notably widespread level of inflation. This persistence has led many analysts to expect that the Federal Reserve will maintain a hawkish tone in the near term to address ongoing inflation risks.