Supply-chain inflation continued surging higher in May, the third month of the ongoing war with Iran, amid deepening energy and trade shocks brought on by the conflict.

Wholesale prices tracked by the producer price index (PPI) jumped 6.5% last month, the fastest clip since late 2022, the U.S. Bureau of Labor Statistics (BLS) reported Thursday.

Producer prices rose 1.1% on a monthly basis, matching April’s growth rate. Economists polled separately by Dow Jones and Reuters had forecast a 0.7% monthly increase.

The hotter-than-expected gains were fueled by a 2.8% spike in the index for final demand goods — fully double the 1.9% April increase and “the largest increase since data were first calculated in December 2009,” the BLS said.

In contrast, wholesale services price growth decelerated to 0.3% from 0.7% the previous month.

The PPI tracks inflation across the U.S. supply chain, offering forward-looking signals on upcoming price changes in the consumer price index (CPI). The BLS reported Wednesday that the CPI increased 4.2% from a year ago in May — its first month above the 4% threshold in three years.

Surging gas prices accounted for much of the CPI increase, which ultimately rose at a slightly slower monthly pace than April.

More than half of the May spike in wholesale goods prices was attributable to a 23.4% increase in the gasoline index. That contributed to a 10.7% jump in the broader energy index, which surpassed the 10.4% gain in wholesale energy costs during the the first month of the Middle East conflict in March.

The final demand food index also saw accelerated price growth of 0.6% compared to 0.2% in April and a decline of 0.6% in March.

Core PPI — which strips out volatile food, energy and trade services prices — increased 0.8% over the month to reflect an annual growth rate of 5.1%. In April, core PPI rose 0.5% over the month and 4.4% year over year.

The CPI and PPI releases represent the last official inflation reports the Federal Reserve will have to consider ahead of next week’s Federal Open Market Committee meeting, the first of Kevin Warsh’s tenure as central bank chairman.

The sharp inflation spikes and an unemployment rate that has remained flat at 4.3% over the first three months of the Iran war have left market-implied odds at nearly 100% that the Fed will leave its benchmark interest rate unchanged in June, according to CME FedWatch.