Economic Pain 'Just Beginning' as Key Index Shows More Inflation From Trump's Iran War

Data released by the US Bureau of Labor Statistics on Wednesday showed continued upward pressure on prices, caused in large part by President Donald Trump's war with Iran.

The Producer Price Index (PPI), which measures wholesale prices paid by businesses, posted a year-over-year gain of 6% in April, the largest yearly increase since December 2022.

Energy prices, which have surged since Trump launched an unprovoked war with Iran in late February, played a large role in raising wholesale costs, as the report finds "more than three-quarters of the broad-based increase in April can be traced to a 7.8% jump in prices for final demand energy."

However, energy prices aren't solely responsible for rising wholesale prices, as the so-called "core" PPI, which excludes the costs of food and energy, posted a yearly increase of 4.4% in April, the largest since February 2023.

PPI is seen as an important gauge of future inflation for consumers, as companies typically pass the costs they pay for inputs onto consumers in the form of price increases.

As explained by Groundwork Collaborative in a social media post, the wholesale costs measured by PPI "are what companies pay before they jack up prices on the rest of us."

"What's in the pipeline now is headed straight for your grocery bill and gas tank," Groundwork Collaborative added. "The pain isn't over. It's just beginning."

CNN economics reporter Elisabeth Buchwald similarly predicted more hurt for US consumers in the coming months, arguing in a Wednesday article that a 6% increase in PPI shows "the pain will not be short-lived."

"Even if the United States were to reach a deal with Iran today, it would still take months for shipments of oil held up by the blockade of the crucial Strait of Hormuz to reach American soil," Buchwald explained. "And even then, it would likely be months—or potentially years—before Americans see gas prices return to levels before the war."

Wednesday's PPI report came one day after the Consumer Price Index showed that consumer prices in April rose by 3.8%, the largest yearly increase since May 2023.

Rep. Brendan Boyle (D-Pa.) reacted to the latest inflation data by ripping into the president's policy decisions, including the Iran war and the global trade war he started shortly after returning to office last year.

"The only thing Trump has made great again is inflation," Boyle, the ranking member of the House Budget Committee, wrote in a social media post. "His disastrous policies—from his tariff taxes to his war in Iran—are making life even more expensive. We shouldn't be surprised the guy who managed to bankrupt a casino isn't an economic mastermind."

Rep. Maxine Dexter (D-Ore.) linked the increased prices to Trump's desire to have Congress spend $1 billion of taxpayer money on his proposed White House ballroom.

"Oregonians need real relief from these high costs at the store and the pump," wrote Dexter. "We must stop the war in Iran and refuse to pay for presidential vanity projects. Oregon families want peace. They need a break, not a ballroom."