Wholesale prices jump to 4-year high and point to even more inflation in the next few months

By Jeffry Bartash PPI climbs 6% in the past 12 months Wholesale price increases signal a further rise in inflation. A recap of consumer prices in April showed inflation climbing to a three-year high. Now the latest look at wholesale prices points to even higher inflation in the next month or two. The producer price index jumped 1.4% in April, the government said Wednesday, to mark the biggest rise in four years. The increase blow past Wall Street's 0.5% forecast and it was also the sixth large increase in a row. Higher oil prices were the chief source of trouble as expected, but it wasn't the only source of inflation. Over the past year, wholesale prices have climbed 6.0%, up from 4.3% in the prior month. That's the highest level since the end of 2022. Wholesale prices are where inflation shows up first, and these prices tend to hint at future changes in what consumers pay. Consumer prices have surge this year to push the rate of inflation to 3.8%, the highest level since 2023. Inflation could soon top 4% before receding, and only then if the Iran war ends and oil prices come back down. With inflation moving away from the Federal Reserve's 2% goal, the central bank will be hard- pressed to cut interest rates soon, even with new Trump appointee Kevin Warsh set to become chairman. Key details: So-called core wholesale prices rose a lesser but still stiff 0.5% in April. IT was also above forecast The 12-month increase in core prices moved up to a three-year high of 4.4% from 3.7%. The core rate strips out volatile food, energy and trade-related costs and gives a more accurate view of inflation trends at the wholesale level. Big picture: Inflation has been running high since the pandemic, defying efforts by the Fed to reduce it to low prepandemic levels. Inflation is likely to remain well above 3% until the Iran conflict winds down and oil prices recede. The cost of oil is up 55% since the start of the war. Stubborn inflation could also discourage senior Fed officials from cutting interest rates this year, an outcome that would be especially painful for homeowners hoping for lower mortgage rates. Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open lower in Wednesday trading. Stocks fell after the PPI report. -Jeffry Bartash This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal. (END) Dow Jones Newswires 05-13-26 0843ET