U.S. producer price growth accelerated last month, in a fresh sign of the potential inflationary impact of an energy shock caused by the Iran war. 

The producer price index for final demand rose by 1.4% on a month-on-month basis in April, compared to expectations for an increase of 0.5%. The rate from March was also revised higher to 0.7%.

It was the largest such rise since March 2022, when the U.S. economy was hit by a burst of inflationary pressure as COVID-era lockdowns began to ease.

In the twelve months to April, PPI jumped by 6.0%, compared to forecasts of 4.9% and an upwardly-revised pace of 4.3% in March. 

Nearly 60% of the April uptick was attributed to a 1.2% advance in the index for final demand services, due mainly to a climb in margins for machinery and equipment wholesaling, the Labor Department said. The indices for truck transportation for freight also gained, as well as those for chemicals, fuels, lubricants, health and beauty.

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Prices for final demand goods moved up 2%, driven in large part by a 7.8% surge in the index’s energy price tracker. Gasoline costs, in particular, spiked by 15.6%, while prices for diesel fuel, jet fuel and industrial chemicals all rose.

Oil prices have skyrocketed since the Strait of Hormuz, a vital waterway off of Iran’s southern coast, was all but shuttered following the outbreak of the war in late February. 

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The global crude benchmark is now hovering well above $100 a barrel. This has, in turn, fueled worries that a wave of inflation could impact countries around the world.

Data earlier this week showed that consumer prices notched their biggest rise in three years in April, also sparked by higher gasoline costs. Analysts have been on the lookout for indications that the effect of soaring energy costs is bleeding into other sections of the economy as well. 

Against this backdrop, the amount of Federal Reserve rate hikes expected by the market in the coming months has increased, although the central bank is seen standing pat in the near term.