WASHINGTON, D.C. — The U.S. producer price index rose 0.5% in March 2026 from February 2026 and 4% from March 2025, the largest year-over-year increase in more than three years, according to the Labor Department. Energy prices rose 8.5% on a monthly basis as the war in Iran drove up energy costs, accounting for much of the increase.

Despite the headline gains, wholesale price gains in March 2026 were smaller than economists had forecast. Excluding food and energy, core producer prices rose just 0.1% from February 2026 and 3.8% from March 2025, according to the Labor Department.

Food prices fell 0.3% in March 2026 after rising 2.4% in February 2026. "The decline in food prices is overdue, and welcome news for everyone," said Carl Weinberg, chief economist at High Frequency Economics. "Food price increases are at the core of political arguments over affordability," he added.

The producer price index measures inflation before it reaches consumers and can serve as an early indicator of future consumer inflation trends. Measures of health care and financial services in the index flow into the personal consumption expenditures price index, the Federal Reserve's preferred inflation gauge.

Separate Labor Department data showed that consumer prices rose 0.9% in March 2026 from February 2026, the largest month-over-month increase in nearly four years. On a year-over-year basis, consumer prices climbed 3.3% compared to March 2025, the largest such increase since May 2024, as gasoline prices pushed costs higher.