US wholesale inflation picked up more than expected in August, government data showed Thursday, driven by higher energy costs in the month – particularly for diesel – as the US war with Iran continued.

Rising prices at the pump are squeezing US households and businesses weeks ahead of key midterm elections, pressuring President Donald Trump’s administration, as average diesel costs hit new highs.

The Producer Price Index (PPI) was up 5.4 per cent year-on-year last month, the Department of Labour said. This was a significant acceleration from the 4.8 per cent rise in July and above the 5.3 per cent that economists expected in a consensus forecast published by MarketWatch.

On a month-on-month basis, PPI rose by 0.4 per cent, in line with analysts’ expectations published by MarketWatch.

Energy costs jumped by 4.2 per cent over the month, notably boosted by the cost of diesel fuel, which surged 24.1 per cent, the Labour Department report said.