Producer prices in the U.S. fell 0.7% in April to follow the 0.6% month-over-month decline seen in March.
The decrease in April largely reflected lower energy prices which dropped 2.5%, driven by an outsized 6.0% plunge in gas prices.
The sharp declines in producer prices in the latest two months come in contrast to muted changes at this time last year and resulted in a sharp moderation in annual inflation at the producer level, with PPI up an extremely modest 0.6% on a year-over-year basis in April following a 1.1% increase in March which was already down sharply from 1.7% in February.
Excluding the volatile energy and food (which fell 0.8% in the month) components, core prices eked out a 0.1% increase in April following gains of 0.2% recorded in each of the previous four months.
The rise in April was led by increases in the prices for pharmaceutical preparations. On a year-over-year basis, the increase in core prices held steady at the 1.7% growth rate seen in both March and February.
