U.S. producer prices fell in June to register their biggest decline since February, according to a new government report released Thursday.
Led by lower food and energy costs, the Producer Price Index, or PPI for short, dropped 0.5% in June after falling 0.3% in May and 0.1% in April.
"In June, over eighty percent of the 0.5-percent decrease in the finished goods index can be traced to prices for consumer foods, which fell 2.2 percent," the Labor Department said. "Also contributing to lower finished goods prices, the index for finished energy goods declined 0.5 percent."
The PPI is the measure of inflation before it reaches consumers.
The core rate, which strips out volatile food and energy costs, inched up 0.1% in June, marking its eight straight monthly increase. Cigarette prices rose 1.4%, leading the advance. Core prices increased 0.2% in May.
Compared to June of last year, prices rose 2.8% —the smallest gain since November, after rising 5.3% in May. The core annual wholesale inflation rate increased 1.1% following a 1.3% uptick in May.
The Consumer Price Index, or CPI, is considered the more closely watched indicator of inflation as is measures prices at the consumer level — it is also the data used as the core engine for the American Inflation Calculator. The most recent reported 12-month inflation rate is standing at 2.0%. The CPI for June is schedule for release on Friday at 8:30 AM Eastern Time.