Wholesale inflation in the United States declined in June, driven largely by a sharp decrease in energy prices, according to data released Wednesday by the Labor Department. The Producer Price Index (PPI), which measures inflation at the wholesale level before it reaches consumers, fell by 0.3 percent from May, marking the largest monthly drop since April 2025. This reversed a 0.6 percent increase recorded in the previous month.

On a year-over-year basis, wholesale prices were up 5.5 percent in June, a slowdown from a 6 percent increase in May. The decline was primarily influenced by a 12 percent drop in gasoline prices in June, although prices remain nearly 43 percent higher than the same period last year, a surge attributed in part to ongoing conflict involving Iran. Food prices also showed a modest decrease during the month. When excluding volatile food and energy components, core wholesale prices increased 4.7 percent compared with a year earlier.

The producer price report was published just one day after the Labor Department released consumer price data showing a 0.4 percent decrease in the Consumer Price Index (CPI) from May to June, representing the steepest monthly decline in four years. Over the past 12 months, consumer prices rose 3.5 percent in June, down from 4.2 percent in May. These cooler-than-anticipated inflation readings eased concerns about the need for further interest rate hikes by the Federal Reserve.

Speaking to Congress on Tuesday in his first appearance as Fed chair, Kevin Warsh emphasized the central bank’s commitment to combating inflation, stating that the Fed has “no tolerance for persistently elevated inflation.” However, the outlook remains uncertain amid intensifying hostilities involving Iran, which continue to influence energy markets and could affect future inflation trends.