WASHINGTON (Reuters] – The U.S. producer price indexes rose higher than forecast in March, amid a spike in service demand. It suggests inflation might remain elevated for a while.

On Wednesday, the Labor Department reported that the producer price index of final demand rose 1.4% following a 0.9% increase in February. The PPI rose 11.2% in the twelve months to March. This is the highest increase in 12 month data since November 2010 when 12-month data was first calculated. It had risen 10.3% in February.

Reuters polled economists and they predicted that the PPI will rise by 1.1%, while accelerating to 10.6% per year.

Russia’s invasion in Ukraine caused a spike in commodity prices such as sunflower oil, wheat, and corn oil.

Russia-Ukraine’s war is now in its second month. China lockdowns to stop a resurgence of COVID-19 infection in China are also seen disrupting supply chains and worsening some products shortages.

Tuesday’s government report showed that gasoline drove the biggest increase in consumer prices for 16-1/2 years. However, there are some signs of optimism about inflation. It has not reached the Federal Reserve’s target of 2%.

In March, the U.S. central banks raised their policy interest rate by 25 base points. It was its first rise in three years. The minutes of last Wednesday’s policy meeting appeared to indicate that there will be big rate hikes down the line. It is likely that the Fed will soon start trimming its assets portfolio.

The producer price index accelerated by 0.9% in March after excluding volatile foods, energy, and trade service components. Core PPI rose 0.2% in February. The core PPI increased 7.0% over the 12-month period ending March after increasing 6.7% in February.