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US wholesale inflation rose sharply last month as Iran oil shock continues to drive up business costs
By
Updated 12 min ago
Updated Jun 11, 2026, 9:22 AM ET
PUBLISHED Jun 11, 2026, 8:34 AM ET
InflationEconomyThe Middle East
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Economists expect that US wholesale prices rose at an annual rate of 6.4% in May.
Scott Olson/Getty Images
Summary
- US wholesale inflation rose 1.1% in May, driven largely by war-related oil price spikes from Iran.
- The annual Producer Price Index reached 6.5%, the highest rate seen in more than three years.
- Higher business costs could eventually filter down to consumers already facing elevated gas prices nationwide.
AI-generated summary was reviewed by a CNN editor.
US businesses’ input costs are rising rapidly as the Iran war’s oil shock continues to ripple through the economy.
The Producer Price Index, a closely watched gauge of wholesale inflation, rose 1.1% in May, lifting the annual rate to 6.5%, its highest in more than three years, a new Bureau of Labor Statistics report showed Thursday.
A war-driven spike in oil prices was largely responsible for the increase in May’s PPI, BLS data showed.
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Wholesale inflation is running at the second-fastest pace on record: The 1.1% increase in monthly inflation, which matched the rate of increase seen in April, is the fastest since March 2022. The annual rate is the highest since November 2022.
PPI, which measures the average change in prices received by US-based producers, serves as a potential bellwether for what consumers could experience in the months to come, though the higher prices businesses pay each other aren’t always fully passed through the supply chain.
PPI also is closely watched because several of its categories feed into the Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation gauge.
Economists were expecting PPI to rise 0.6% from April and the annual rate to reach 6.4%.
Excluding food and energy prices, a core measurement of PPI rose 0.4% from April, holding at 4.9% annually.
When also stripping out the price changes for “trade services” – a volatile category that measures profit margins for wholesalers and retailers – in addition to energy and food, that index rose 0.8% in May (a four-year high) and 5.1% annually, the largest rise since October 2022.
Wholesale inflation can eventually impact consumers’ wallets; however, it happens on an indirect and uncertain path, noted Elizabeth Renter, senior economist at NerdWallet.
Wholesale goods cross several layers – transportation, packaging, distribution, etc. – before hitting retail shelves, she noted.
“And businesses at both the wholesale and retail level can act as a buffer to consumers, absorbing at least some of the price growth if they’re concerned about their customers’ ability to stomach higher and higher prices,” she wrote in a note on Thursday.
That said, “the latest figures portend some inflationary pressures will continue to weigh on households in the months ahead.”
Consumers are already feeling the pinch from the higher cost of gas: In May, elevated prices at the pump helped push overall inflation to a three-year high of 4.2%, according to the latest Consumer Price Index, released Wednesday.
This story is developing and will be updated.
InflationEconomyThe Middle East
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