The latest surge in fuel prices is proving harder to absorb than the spike earlier this year, with businesses and consumers left with less capacity to cushion the shock — and fresh price data showing inflation is now spilling beyond energy.

Crude oil prices have moderated somewhat even as the Iran war has recently reescalated, but refining constraints have kept gasoline and diesel costs elevated. Average diesel prices hit $6.30 a gallon on Wednesday, up about 68% from before the Iran war, according to AAA. Because diesel is a critical industrial fuel used in manufacturing, farming, and transportation, its climb has been felt across nearly every sector of the economy.

Government data pointed to growing cost pass-through. The Labor Department's consumer price index showed core inflation rising to 2.6% in September from 2.4% in August, a signal that businesses are passing more of their costs on to customers. Because core CPI strips out food and energy prices, its climb suggests cost pressures are taking hold well beyond the pump. Meanwhile, the retail sales report showed core spending outside gas stations rose just 0.2%, as fuel took a bigger bite out of household budgets.

Those trends were echoed the Federal Reserve's latest Beige Book survey of business and economic conditions — a periodic compilation of anecdotal reports from the central bank's 12 regional district banks — which was filled with warnings about higher fuel prices across the country. The report found that fuel surcharges were multiplying throughout the supply chain, profit margins were being squeezed, and consumers were pulling back on spending to offset the pain at the pump.

District-level detail underscored the breadth of the pressure. The New York Fed said one food manufacturer had not seen such broad-based inflationary pressures since the pandemic. The San Francisco Fed noted another manufacturer's complaint that every material purchased in recent weeks came with a freight surcharge.

The Boston Fed said existing trucking contracts had helped keep produce prices in check, but that costs could jump when those agreements are renegotiated. The Philadelphia Fed pointed to a parallel dynamic: the expiration of some hedges that had kept costs stable has given manufacturers greater pricing power, allowing them to pass on increased costs.

"Higher fuel costs remained the dominant driver, and several contacts noted that these costs were spilling over into freight, packaging, and petroleum-based materials," the Cleveland Fed said in the Beige Book, adding that one builder described high fuel costs and tariffs as a "double whammy."

Consumer spending in the Cleveland Fed's district was flat after four straight periods of decline, with retailers across sectors blaming slow activity on high fuel prices. Not every district saw a pullback: most reported little or no change in overall consumer spending, and the Richmond Fed said spending in its region grew moderately.

Trucking companies are charging more, but many are also absorbing costs — no small burden in a freight business where fuel ranks among the largest operating expenses. The Richmond Fed said carriers struggled to turn a profit when diesel prices rose after they had locked in contract rates. To cover the increases out of pocket, trucking firms have drawn down savings, redirected spending away from maintenance, or halted purchases of fuel-efficient trucks.

One business surveyed by the Richmond Fed illustrated how higher fuel prices have turned cost structures upside down. "A regional grocery chain noted that with diesel prices rising 30% since last year, they now pay more to transport a head of lettuce from California than the cost of the lettuce itself," the Beige Book said. "At the same time, the grocer noted extreme customer price sensitivity and an inability to pass along those rising transportation costs."

Volatility itself has become a problem. The Minneapolis Fed reported that a Montana timber company said fuel costs had more than doubled on a project contract signed several months ago.

The Kansas City Fed said higher diesel costs have forced suppliers, distributors, and customers to renegotiate contract terms to protect profits, with a majority of firms in its district expecting demand to weaken further if fuel prices remain elevated.

Some districts also reported signs of supply strain. The Kansas City Fed said several regional contacts in rural Colorado reported "intermittent diesel shortages at gas stations in recent weeks, causing some buyers to take early delivery of fuel shipments to ensure availability."

Added fuel expenses are also spilling over into the labor market, as workers demand higher pay — a dynamic that risks stoking further inflation through a wage-price spiral. The Cleveland Fed reported that several of its business contacts handed out pay raises because of higher living costs, particularly for gasoline and electricity. The San Francisco Fed's contacts mentioned employees requesting, and in some cases receiving, cost-of-living pay hikes to offset higher fuel and food prices.

"The higher price for diesel reigned supreme in terms of the most commonly cited factor driving up costs, impacting freight, agriculture, and airline prices as well as causing widespread margin compression across numerous industries," the Dallas Fed said.

American consumers have shown surprising resilience weathering President Donald Trump's tariffs and the war on Iran, but they have now lost a major buffer. When gas prices jumped this spring after the Iran war began, Americans were starting to receive tax refunds boosted by last year's One Big Beautiful Bill Act. With the war now in its eighth month, no end in sight, and gas prices surging again, consumers no longer have that cushion to fall back on.

"Higher gas prices are beginning to bite because, unlike earlier in the year, there's no offset this time around from fiscal policy," Michael Pearce, chief U.S. economist at Oxford Economics, wrote in a note Thursday. "We estimate the cumulative additional spend on gasoline so far this year now outweighs the rise in tax refunds from a year ago."

The clearest signals to watch from here are whether renegotiated trucking contracts and lapsed hedges reset costs higher — dynamics flagged by the Boston and Philadelphia Feds — and whether the intermittent diesel shortages reported in rural Colorado remain isolated or spread.

This story was originally featured on Fortune.com.