Producer prices in the US shot up by much more than expected in the month of April, according to a Labor Department report released on Wednesday.
The Labor Department said its producer price index for final demand jumped by 1.4% in April after climbing by an upwardly revised 0.7% in March.
Economists had expected producer prices to rise by 0.5%, matching the increase originally reported for the previous month.
The report also said the annual rate of growth of consumer prices soared to 6% in April from 4.3% in March, coming in well above economist estimates for a 4.9% surge and marking the fastest growth since a 6.4% spike in December 2022.
"The jump in input prices portends further increases for consumer prices in May," said Nationwide Senior Economist Ben Ayers. "We expect annual CPI inflation to move above 4% in May with energy prices still highly elevated more than two months into the Iranian conflict."
"With inflation still trending higher, we expect the hawkish wing of the FOMC to advocate for an extended pause in interest rates even with incoming Fed Chair Kevin Warsh likely to prefer to lower rates over time."
The monthly increase in producer prices marked the largest advance since a 1.7% jump in March 2022.
Energy prices helped lead the way higher during the month, spiking by 7.8% in April after soaring by 10.1% in March.
The extended surge in energy prices accounted for more than three-quarters of the 2% jump in prices for goods.
The report also showed a sharp increase in prices for services, which shot up by 1.2% in April after rising by 0.2% in March.
Prices for transportation and warehousing services spiked by 5%, while prices for trade services surged by 2.7% and prices for other services crept up by 0.1%.
The Labor Department said core producer prices, which exclude prices for food, energy and trade services, climbed by 0.6% in April after inching up by 0.2% in March.
The annual rate of growth of core producer prices accelerated to 4.4% in April from 3.7% in March, surging at the fastest rate since a 4.5% spike in February 2023.
