The producer-price index declined by 0.3% in June, the Labor Department said, after increasing by an elevated 0.6% in May. Analysts had estimated that producer prices held steady last month.

The unexpected drop in wholesale prices suggests inflationary pressures may be easing at the production level. The 0.3% decline marks the first monthly decrease since early 2023 and contrasts sharply with the 0.6% surge recorded in May.

Economists had forecast the index would remain unchanged, making the 0.3% drop a significant surprise. The data could influence Federal Reserve policy decisions as officials monitor inflation trends across the economy.

The report shows final demand goods prices fell 0.8%, while services prices edged up 0.1%. Energy prices dropped 3.4%, led by a 5.2% decline in gasoline. Food prices rose 0.4%.