Business inflation in May surged to its highest level since late 2022, as high fuel prices triggered by the war with Iran ripple across the U.S. economy.

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New data released Thursday showed that from April to May, the Producer Price Index rose 1.1% month-over-month.

Even more notably, it rose to 6.5% from the same period a year ago.

The year-over-year reading was “the largest 12-month rise since moving up 7.4% in November 2022,” the Bureau of Labor Statistics said in a statement.

The data comes one day after the Consumer Price Index showed that overall inflation rose in May to its highest level since early 2023.

Core PPI, which excludes food and energy costs, rose to 4.9% annually.

The jump in producer prices surprised economists and drew renewed attention to President Donald Trump’s remark Wednesday at the White House where he said, “I love the inflation.”

“When the war is over, it’s coming down, it’s going to come down like a rock,” Trump added.

The president later claimed that his words had been taken out of context, telling The New York Post, “The numbers are much lower than anticipated.”

But neither Wednesday’s Consumer Price Index nor Thursday’s business inflation report were lower than expected.

The direct line from higher gas prices to higher inflation was stark: BLS said that 80% of the surge in the overall PPI figure Thursday was attributable to surging energy costs.

Taken together, the PPI and CPI readings reveal an economy under ever more stress from oil prices that remain 40% higher since the war with Iran started on Feb. 28.

So far this year, oil prices have climbed about 60%.

E.J. Antoni, Trump’s former nominee to lead the Bureau of Labor Statistics, described the business inflation report Thursday as “eye-watering.”

“This is getting really ugly,” he wrote in a post on X.

Thursday’s data will also likely factor into the a decision by the Federal Reserve to keep interest rates on hold for now.

Still, futures market traders are currently projecting that the central bank will have to hike rates in order to tame inflation by December, with a 60% chance that a hike could happen as soon as October.

“The Fed will be hard pressed to look through the firming in inflation,” said Stephen Juneau, U.S. Economist at Bank of America.

Central banks typically discount or “look through” energy inflation over short periods of time until higher prices spill into other sectors of the economy.

Also contributing to higher producer prices was a sharp 4.8% rise in portfolio management fees, which also came alongside a seemingly unstoppable rise in stocks.

Earlier on Thursday, another central bank, the European Central Bank, hiked interest rates. ECB president Christine Lagarde said that inflation was not projected to return to 2% until late 2027.