US Wholesale Prices Surge 4% After Iran War Drives Up Energy Costs

The producer price index rose 0.5% from February and 4% from March 2025, the biggest year-over-year gain in more than three years.

Apr. 14, 2026 at 10:51pm

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An extremely detailed, bird's-eye-view photograph of an oil refinery complex with rows of massive storage tanks, pipelines, and processing units, conveying the scale and complexity of the global energy infrastructure that has been disrupted by the Iran conflict.The Iran war's impact on global energy supplies has driven a surge in wholesale prices, complicating the Federal Reserve's efforts to control inflation.Washington Today

U.S. wholesale prices surged last month as the war in Iran drove up the cost of energy. The Labor Department reported that its producer price index, which measures inflation before it hits consumers, rose 0.5% from February and 4% from March 2025. Energy prices surged 8.5% from February, though food prices fell 0.3% after a previous 2.4% jump.

Why it matters

The surge in wholesale prices complicates the work of the Federal Reserve, which has faced pressure to lower interest rates but may now need to raise them to combat the inflation threat from higher energy costs. The rising prices could also become a political issue ahead of the midterm elections, with food prices being a particular concern.

The details

The Labor Department's producer price index, which measures inflation before it hits consumers, rose 0.5% from February and 4% from March 2025. Excluding volatile food and energy prices, core producer prices rose a more modest 0.1% from February and 3.8% from a year earlier. The gains in wholesale prices were smaller than economists had forecast. Energy prices surged 8.5% from February, while food prices fell 0.3% after a 2.4% jump the previous month.

  • The Labor Department reported the data on Tuesday, April 14, 2026.
  • The year-over-year gains were the biggest in more than three years.

The players

Labor Department

The U.S. government agency that reported the producer price index data.

Federal Reserve

The U.S. central banking system that is responsible for setting monetary policy and fighting inflation.

President Donald Trump

The former U.S. president who has pressured the Federal Reserve to lower interest rates.

Scott Bessent

The U.S. Treasury Secretary who commented on the economic impact of the Iran conflict.

International Energy Agency

The international organization that forecasts oil demand and expects a decline due to the Iran war.

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What they’re saying

“The decline in food prices is overdue, and welcome news for everyone. Food price increases are at the core of political arguments over affordability.”

— Carl Weinberg, Chief Economist, High Frequency Economics

“A small bit of economic pain for a few weeks is worth taking off the incalculable tail risk of the either a nuclear Iran or a nuclear Iran that uses that weapon.”

— Scott Bessent, U.S. Treasury Secretary

What’s next

Diplomats are continuing attempts to arrange a new round of peace talks between the United States and Iran to try to end the conflict, which has driven up energy prices and contributed to the surge in wholesale inflation.

The takeaway

The sharp rise in wholesale prices, driven by surging energy costs from the Iran war, will put pressure on the Federal Reserve to raise interest rates to combat inflation, even as it faces political pressure to lower them. This economic fallout from the conflict could become a major issue in the upcoming midterm elections.