US wholesale prices surged 4% last month after the war in Iran sent energy prices flying

WASHINGTON (AP) — U.S. wholesale prices surged last month as the Iran war drove up the cost of energy.

The Labor Department reported Tuesday that its producer price index — which measures inflation before it hits consumers — rose 0.5% from February and 4% from March 2025. The year-over-year gains was the biggest in more than three years. Energy prices surged 8.5% from February.

Excluding volatile food and energy prices, so-called core producer prices rose a modest 0.1% from February and 3.8% from a year earlier. The gains in wholesale prices were smaller than economists had forecast.

The surge in prices complicates the work of the inflation fighters at the Federal Reserve, who have faced intense pressure from President Donald Trump to lower their benchmark interest rate. But some Fed policymakers are inclined to raise rates instead, as higher energy costs increase the inflation threat.

Food prices, which will most certainly be front and center in next year's midterm elections, fell by 0.3% in March after surging by 2.4% in the previous month.

Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably measures of health care and financial services, flow into the Fed’s preferred inflation gauge — the personal consumption expenditures, or PCE, price index.

The most recent peek at inflation in the U.S. validates a recent shift by the U.S. Federal Reserve to intensify its focus on rising costs, wrote Carl Weinberg, the chief economist at High Frequency Economics.

“The decline in food prices is overdue, and welcome news for everyone,” Weinberg said Tuesday. “Food price increases are at the core of political arguments over affordability.”

The Labor Department reported last week that soaring gasoline prices pushed consumer prices up 3.3% last month from a year earlier, the biggest year-over-year increase since May 2024. Compared to February, March consumer prices jumped 0.9%, biggest gain in nearly four years.

The war in Iran and soaring energy prices will lead to an annual decline in oil demand for the first time since the pandemic, when billions of people were trying to live in isolation, according to a forecast Tuesday by the International Energy Agency.

The agency, formed after the 1974 oil crisis, said that oil demand is expected to decrease by an average of 80,000 barrels a day this year, a sharp revision from the increase of 850,000 barrels a day that it had forecast before the war began.

The drop-off in March was particularly severe because of attacks on energy infrastructure and the shutdown of the Strait of Hormuz, according to the IEA, which expects a decline in demand of 1.5 million barrels in the current quarter.

Treasury Secretary Scott Bessent told reporters Tuesday that “a small bit of economic pain for a few weeks is worth taking off the incalculable tail risk of the either a nuclear Iran or a nuclear Iran that uses that weapon.”

“So the conflict will end, prices will come down, and then headline inflation will come down, and with that, gasoline prices will come down," Bessent said. "We’ve seen them edging back down in the past 10 days.”

The average price for a gallon of regular gasoline in the U.S. has declined about 3 cents in that time span but it remains well above $4 per gallon, and costs about 30% more per gallon than it did at this time last year.

And there is no definitive end date for the conflict. Washington enacted its blockade of Iranian ports this week while Tehran threatened to strike targets across the region. Diplomats on Tuesday continued attempts to arrange a new round of peace talks between the United States and Iran.

AP Reporters Michelle Chapman in New York City, and Fatima Hussein, in Washington, contributed to this report.

A customer shops in the meat aisle at a grocery store in Portland, Ore., Wednesday, April 8, 2026. (AP Photo/Jenny Kane)

The prices for the grades of gasoline available are electronically displayed on the pump at a QuikTrip gasoline station Sunday, April 12, 2026 in Greenwood Village, Colo. (AP Photo/David Zalubowski)

PARIS (AP) — A Parisian man could not believe his luck on Tuesday when he found out he'd won a Pablo Picasso painting worth $1 million with a $117 raffle ticket.

“How do I check that it’s not a hoax?” said Ari Hodara, 58, after organizers called him following the draw at Christie’s auction house in the French capital.

Hodara described himself as an art amateur fond of Picasso and said he bought his ticket over the weekend after finding out about the charity raffle by chance during a meal in a restaurant.

“First, I will tell the news to my wife, who has yet to return from work,” said Hodara, a sales engineer. “And at first, I think I’ll take advantage of it and keep it.”

The third iteration of the “1 Picasso for 100 euros” lottery was for Picasso’s “Head of a Woman,” a portrait of Picasso’s longtime muse and partner Dora Maar. The gouache-on-paper was painted by the artist in 1941.

The online draw offered the chance to win a $1 million portrait by the Spanish artist in aid of Alzheimer’s research.

Organizers said all 120,000 tickets were sold worldwide, netting 12 million euros ($14 million). Of that, 1 million euros will be paid to the Opera Gallery, an international art dealership that owned the painting.

Gilles Dyan, the gallery founder, said he offered a preferential price for the painting, with the public price at 1.45 million euros.

The first raffle in 2013 saw a Pennsylvania man who worked at a fire-sprinkler business win “Man in the Opera Hat,” which the Spanish master painted in 1914 during his Cubist period.

The oil-on-canvas “Still Life” was raffled off in 2020 and won by Claudia Borgogno, an accountant in Italy whose son bought her the ticket as a Christmas present.

Painted in 1921, that painting was purchased for the raffle from billionaire art collector David Nahmad, who argued in an interview with The Associated Press that Picasso would have approved of his work being raffled. Picasso died in 1973.

The Alzheimer Research Foundation, the charity raffle’s organizer, is based in one of Paris’ leading public hospitals and says it has become France’s leading private financier of Alzheimer-related medical research since its founding in 2004.

Organizers said the two previous Picasso raffles raised a total of more than 10 million euros for cultural work in Lebanon and water and hygiene programs in Africa.

People look at the Head of a Woman by Pablo Picasso, painted in 1941, in Paris, Friday, April 10, 2026, ahead of a lottery in which the painting is being raffled off to raise money for Alzheimer’s research (AP Photo/Michel Euler)

Peri Cochin, co-founder of the "1 Picasso for 100 euros" poses next to Head of a Woman by Pablo Picasso, painted in 1941, in Paris, Friday, April 10, 2026, ahead of a lottery in which the painting is being raffled off to raise money for Alzheimer’s research. (AP Photo/Michel Euler)