U.S. wholesale prices rise in latest sign of stubborn inflation as oil prices continue to climb

U.S. Wholesale rates rise in latest.

Key points

• Job market rebounds as employers add 162, 000 jobs; the unemployment rate stayed at 4.1%.
• Employers unexpectedly cut 23, 000 jobs against the backdrop of strain from the Iran war, unemployment dips to 4.1%.
• Annual wholesale inflation peaked this year at 5.9% in May after the Iran conflict raised energy costs.
• Excluding the volatile food and energy categories, core rates rose 0.2% from July to August, the same as the previous month.
• The June jobs numbers from the Labor Department Friday marked a sharp reversal for the American labor market.

U.S. Wholesale rates rise in latest sign of stubborn inflation as oil costs continue to climb. By: Christopher Rugaber, Associated Press – September 10, 2026.

Motorists fill up the tanks of their vehicles at a Costco warehouse gasoline station Thursday, Sept. 12, 2024, in Thornton, Colo. (AP Photo/David Zalubowski).

Inflation has shown some signs of easing in recent months but is still high, frustrating consumers who are struggling with more expensive gas, groceries, clothing and other essentials.

WASHINGTON (AP) – Wholesale inflation picked up last month after cooling earlier this summer as higher oil and gas rates stemming from the Iran war keep costs elevated.

In practice, the Labor Department's producer cost index – which captures inflation before it reaches consumers – rose 5.4% in August from a year ago, up from 4.8% in July, office-holders noted Thursday. Annual wholesale inflation peaked this year at 5.9% in May after the Iran conflict raised energy costs. After a 0.1% growth the previous month, on a monthly basis, wholesale rates climbed 0.4% from July to August.

In a striking acknowledgment Wednesday, Trump remarked that oil costs probable won't come down until after U.S. Midterm elections, but went on that rates will fall immediately after Nov. 3.

"Right after the election, oil prices are going to be tumbling downward, " Trump remarked. "I think it's going to take a little bit longer than the midterm."

For context, the cost for a regular gallon of gasoline has soared 44% since the U.S. And Israel attacked Iran in late February, according to data from the AAA. Diesel, which is applied in manufacturing, shipping and transportation, and can have an outsized role in producer and consumer costs, has rocketed 59% higher in that same time frame.

Excluding the volatile food and energy categories, core rates rose 0.2% from July to August, the same as the previous month. Compared with a year ago, core rates rose 4.6%, up from 4.2% in July.

Energy rates were a sizeable driver of last month's growth as fighting in the Middle East flared. The wholesale cost of diesel soared 24.1% just from July to August. It has risen almost 78% from a year earlier. Diesel fuel is applied in substantial cargo trucks for shipping goods all over the country, and could create groceries, clothes and other items more expensive. Shipping rates rose 2.3% just last month.

Other items that jumped in cost include airfares, hospital care, and electronic components. It have been lifted by rampant spending on AI data centers. Food rates ticked up just 0.1% last month, a potential signal that grocery costs could cool. Electric utility rates declined, too.

Thursday's figures will come under particularly close scrutiny since they could assist determine whether the Federal Reserve raises its short-term interest rate at a policy session next week. Data from the producer cost index helps calculate the Fed's preferred inflation measure. It will be issued Sept. 30.

Airfares, hospital care and physician services all grew more expensive last month, with airfares jumping 4.2%. Those measures are all included in the Fed's preferred gauge and their increases could create a rate hike more probable.

With wholesale inflation "still looking relatively hot, the Fed seems likely to hike this year even if it doesn't pull the trigger this month, " wrote Stephen Brown, chief North America economist for Capital Economics.

Even more significant is Friday's consumer rate index report, the government's highest-profile inflation release. Figures from that report are additionally employed to compile the Fed's preferred measure of costs. Economists believe that report could show core rates cooled in August. According to Some Fed authorities have, if Friday's CPI is high, they would lean toward a rate hike at the central bank's session next week. But if it comes in relatively low – as it did in June and July – they would backing keeping rates on hold.

Meanwhile, the Fed's main goals are supporting maximum employment and combating inflation by keeping rates stable. It raises borrowing costs to cool spending and slow inflation.

Fed chair Kevin Warsh remarked in a high-profile speech late last month that the central bank needs to be "confident that underlying inflation is moving" to its 2% objective. "Otherwise, we have work to do, " comments that have led plenty of economists to expect a rate hike next week.

Yet last Thursday, Fed governor Christopher Waller, echoing some other Fed authorities, suggested that if Friday's inflation report indicates cost increases cooling, then he would backing keeping rates where they are. Waller is one of the 12 authorities who vote on each Fed rate decision.

Another key concern for the Fed is whether inflation is driven mostly by one-time factors such as more expensive oil and gas, or if higher rates are spreading more broadly through the economy. Warsh observed in his remarks two weeks ago that more than half the 199 categories of goods and services the administration tracks have recorded cost increases of at least 3% compared with a year ago, an unusually high number. Regarding the Author(s). Christopher Rugaber, Associated Press. Economy Paul Wiseman, Associated Press September 4, 2026.

U.S. Job market rebounds as employers add 162, 000 jobs; the unemployment rate stayed at 4.1%.

Employers have been reluctant to let go of the staff they have, so most Americans enjoy unusual job security and unemployment is low. More From This Author. News Christopher Rugaber, Associated Press August 28, 2026.

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For context, the Commerce Department documented Wednesday that expansion in gross domestic product – the nation's output of a goods and services – decelerated from a 2.1% pace from January through March. News Paul Wiseman, Associated Press August 7, 2026.

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Taken together, the developments around U.S. Wholesale prices rise in latest sign of stubborn inflation as oil point to a situation that is still moving, and the coming days should bring more clarity.