The prices of several goods in the United States rose steeply over the past year, in part driven by a surge in energy costs due to the Iran war, according to data released by the U.S. Department of Labor on Thursday.
The latest Producer Price Index (PPI), which measures inflation before products reach consumers, came a day after President Donald Trump—elected on a promise to lower costs for Americans—told reporters he loved inflation, after Bureau of Labor Statistics (BLS) data also showed rising prices.
While some costs for items including meat, rice and eggs fell year-on-year, other commodities saw large spikes, including diesel fuel, which rose a whopping 105.9 percent. Some PPI increases took inflation to levels not seen since 2022, under former President Joe Biden.
“President Trump has always been clear about the fact that oil and gas prices – and thus overall inflation – will rapidly drop as soon as the Iran situation is resolved,” White House Spokesman Kush Desai told Newsweek Thursday. “Prior to the start of Operation Epic Fury, American workers had recovered almost half of the real wage losses they experienced under Joe Biden thanks to this Administration’s commonsense agenda of deregulation, tax cuts, and energy abundance – an agenda that the Administration continues to implement to deliver more economic relief for the American people.”
Newsweek reached out to the Department of Labor for comment via email Thursday afternoon.
List of Products with High Cost Increase
- Energy prices have been the dominant driver of inflation, with sharp month-to-month spikes and large year-over-year increases.
- Goods prices have accelerated faster than services, indicating pressure at earlier stages of the supply chain.
- Core inflation—excluding food and energy—has risen more modestly, suggesting the surge is not yet fully broad-based.
Economists say PPI is especially important because it acts as an “early warning system” for consumer inflation, capturing cost increases before they filter down to households. When producer costs rise quickly, businesses typically face a choice to either absorb the costs or pass them onto consumers. Over time, these increases often show up in higher retail prices.
Recent data suggests that dynamic may already be underway. Consumer inflation has also picked up, with analysts noting that sustained increases in wholesale costs could keep price pressures elevated in the months ahead.
Why Are Oil and Gas Prices So High?
The current surge in wholesale inflation is being driven in large part by energy markets, which have been turbulent in the months following the U.S. and Israeli strikes on Iran in late February, leading to the closure, or blockade, of the Strait of Hormuz.
Economists and analysts have pointed to disruptions in global oil supply and elevated gasoline prices as key factors, with wholesale gas prices jumping sharply in recent data.
This concentration matters politically and economically, as energy-driven inflation is often more volatile, but it can still have broad ripple effects across transportation, manufacturing and food prices.
The result is a form of inflation that is both highly visible to consumers and difficult for policymakers to control in the short term.
Donald Trump’s Economic Messaging
Trump made lowering prices, and reversing what he has described as inflationary policies, a central theme of his campaign for reelection in 2024 and his administration has also made promises on lowering the cost of living. However, the latest inflation data presents a complicated backdrop for those arguments.
While headline wholesale inflation is rising, much of the recent increase appears tied to external factors like energy supply disruptions rather than broad domestic demand or fiscal policy. Analysts note that core inflation measures have remained comparatively restrained, suggesting that the surge is not entirely structural.
On Wednesday, Trump was asked if he was concerned about inflation numbers, after the BLS found that prices rose 0.5 percent in May.
“No. I love it. The numbers were great. You know what I really love? I love the inflation,” he said. “You know why? Because as soon as this war is over, you know I can say it now. Something you didn’t know—did you know we’ve been taking out millions of barrels of oil? Nobody knows it. You know who doesn’t know about it? Iran, until right now. We took out the other night 22 ships, late at night, with no lights because they don’t have any radar because we blasted the crap out of it. That’s why oil is $85 a barrel.”
The president’s approach to the economy has led to low approval ratings on the issue. In one recent poll, only 29 percent of Americans said they strongly or somewhat approve of Trump’s management of the economy, while 63 percent disapprove.
What This All Means
The latest producer price data paints a picture of an economy still grappling with inflation at its source. Over the past year, price increases—particularly in energy and goods—have pushed wholesale inflation higher, even as underlying trends remain more contained.
For voters, the effects are likely to be felt in everyday costs, while for policymakers, the challenge is balancing inflation risks against economic slowdown. For Trump and his opponents, the numbers are likely to become a central talking point as the 2026 midterm campaigns intensify.
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