US producer inflation subsides as energy, food prices drop

• Producer price index falls 0.3% in May
• PPI increases 1.1% year-on-year, smallest gain since 2020
• PPI excluding food, energy, trade services unchanged

U.S. producer prices fell more than expected in May as the costs of energy goods and food declined, signaling that inflation pressures were abating throughout the economy and could eventually provide relief to consumers.

The report from the Labor Department on Wednesday also showed the annual increase in producer inflation last month was the smallest in nearly 2-1/2 years. Underlying producer prices were muted. It followed data on Tuesday showing consumer prices edging up in May, with the year-on-year rise the smallest since March 2021.