In another sign of cooling inflation, producer prices in the U.S. dropped more than expected in May as prices for energy and food declined, according to the Bureau of Labor Statistics and business media reports.

The Producer Price Index for final demand declined 0.3% in May, according to BLS data. Final demand prices rose 0.2% in April and fell 0.4% in March.

On an unadjusted basis, the index for final demand moved up 1.1% for the 12-month period that ended in May. The decline in the final demand index can be traced to prices for final demand goods, which fell 1.6%.

The annual increase in PPI for May was the smallest in more than two years. The announcement comes the same day as the Federal Reserve Board voted to hold interest rates steady after 10 consecutive raises dating back to March 2022.

Prices for final demand other than foods, energy and trade services were unchanged in May after inching up 0.1% in April. For the 12 months ending May, the index for final demand less foods, energy and trade services increased 2.8%.

On June 13, the Bureau of Labor Statistics announced that the Consumer Price Index in May rose just 4% over the same period a year earlier, the slowest annual rate of inflation in more than two years.