Producer prices declined in June as lower energy costs more than offset increases elsewhere in the economy, according to the latest Producer Price Index (PPI) report released July 15 by the U.S. Bureau of Labor Statistics.

The PPI for final demand fell 0.3% in June on a seasonally adjusted basis, reversing increases of 0.6% in May and 1.1% in April. On an unadjusted basis, producer prices were up 5.5% over the previous 12 months, down from May’s 6.5% annual increase.

The monthly decline was driven primarily by a 1.4% drop in prices for final demand goods, led by a 6.4% decrease in energy prices. Gasoline prices fell 12% during the month, accounting for roughly two-thirds of the overall decline in the headline index. Food prices also edged lower.

Prices for final demand services increased 0.2% in June following a 0.3% gain in May. More than half of the increase came from higher trade services margins, while fuel and lubricant retailing also contributed to the advance.

Core producer inflation remained more stable. Excluding food and energy, the PPI increased 0.2% from May, while the index excluding food, energy and trade services rose 0.1%. On a year-over-year basis, the latter measure advanced 5.1%.

The June report followed the Labor Department’s June Consumer Price Index release on July 14, which likewise pointed to moderating inflation pressures after recent energy-driven volatility. Together, the two reports provide key inputs for the Federal Reserve’s preferred Personal Consumption Expenditures (PCE) inflation gauge, due later this month. Economists said the softer wholesale inflation data could help keep core PCE growth relatively contained in June.