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.

That is much lower than the previous month’s 1.7% gain, which reflected a surge in car sales as consumers sought to get ahead of President Trump’s 25% duty on auto imports that went into effect this month.

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.

U.S. consumer prices rebounded moderately in April, but inflation is likely to pick up in the coming months as tariffs boost the cost of imported goods. The consumer price index CPI increased 0.2% last month after dipping 0.