The Producer Price Index, a closely watched measurement of wholesale inflation, showed Thursday that the prices paid to US producers dropped 0.5% in April from the month before, a much softer reading than economists expected, while inflation slowed on an annual basis to 2.4%, from 2.9% in March, according to Bureau of Labor Statistics data.

The Consumer Price Index jumped 2.3% in April from the year before, below March’s 2.4% increase, the Bureau of Labor Statistics said Tuesday.

Food inflation in April tapered by 20 bps to 2.8%. Downward pressure came from cereals, meat, and dairy products; offset by a spike in non-alcoholic beverages. Energy inflation in Mar-25 weakened by 40 bps to -3.7%. Downward pressure again came from fuel and gasoline; offset by a spike in electricity and piped gas.

U.S. consumers spent slightly more at retail stores last month after ramping up their shopping in March to get ahead of tariffs.

Despite a general easing in the weighted index, key goods continue to rise, and tariff impacts loom ahead.

The US Fed decided to keep the key benchmark interest rates unchanged at the range of 4.25% to 4.5% on Wednesday, May 7. Chairman Jerome Powell reiterated his stance of ‘no hurry to cut rates’ as the Fed plans to analyse economy ahead of a potential rate cut.