Wholesale inflation surged sharply in September, driven largely by rising fuel costs linked to conflict in the Middle East, according to government data released Thursday. The increase presents persistent economic challenges for consumers while adding political pressure on Republicans ahead of the November midterm elections.

The Labor Department reported that the producer price index (PPI), which tracks inflation at the wholesale level before goods reach consumers, rose 6.3% from a year earlier. This marks the largest annual increase since December 2022 and an acceleration from August’s 5.6% rise. On a monthly basis, wholesale prices climbed 1.3% from August to September, the highest single-month gain since March 2022, compared to a 0.5% increase the previous month.

Fuel costs, especially diesel used by long-haul trucks and freight trains, were a significant factor pushing up prices across the supply chain. Transportation and warehousing expenses rose 3.4% in September and have surged 16% over the past year. These increases have begun to ripple through to consumer prices, including food, where wholesale costs jumped 1.2% in the latest month, though they remain steady compared to a year ago.

Carl Weinberg, chief economist at High Frequency Economics, noted that higher transportation costs impact virtually all goods in the economy because they affect the movement of materials to factories and finished products to retailers. Diesel is also essential for farm equipment, potentially adding upward pressure on food prices. According to AAA, diesel prices averaged $6.32 per gallon nationwide on Thursday, nearly doubling from $3.66 per gallon a year prior.

The September PPI data builds on a consumer price index report from Wednesday that showed accelerating price growth, primarily driven by higher gasoline costs. Excluding volatile food and energy sectors, core wholesale prices increased 0.7% month-over-month, a notable jump from 0.2% in August. The year-over-year increase in core prices rose to 5% from 4.6% the previous month.

Besides fuel, the report highlighted rising costs for electricity, vegetables, shipping, and air travel. The persistence of inflation continues to erode Americans’ purchasing power and dampen consumer confidence in the economy.

This inflation surge also poses political challenges for former President Donald Trump and the Republican Party. A recent poll by the AP-NORC Center for Public Affairs Research found that only 17% of U.S. adults approve of Trump’s management of the cost of living, while just 26% support his handling of the economy overall.

Meanwhile, the Federal Reserve is scheduled to hold a policy meeting in two weeks, where officials will consider whether to maintain or raise key short-term interest rates to address ongoing inflationary pressures.