Inflation as measured by the producer price index fell to a 0.1% annual rate in June.

On a month-to-month basis, the wholesale price index increased by 0.1%, the Bureau of Economic Analysis reported Thursday morning.

The annual decrease is a further indication that inflationary pressures are abating in the face of the Federal Reserve’s campaign to slow economywide spending by hiking interest rates. The PPI's headline number is now the lowest it has been since September 2020.

Core inflation, which strips out movement in volatile food, energy, and transportation, is still running above headline PPI inflation. It clocked in at a 2.6% annual rate in June.

INFLATION DROPS TO 3% IN MAJOR BOOST FOR BIDEN AND BIDENOMICS

Thursday’s PPI report comes a day after the June release of the consumer price index, which is even more closely watched. Inflation in the CPI fell to a 3% annual rate, a decline of a whole percentage point from the preceding month.

The annual CPI inflation rate has been trending down since peaking last June and is now running at the lowest level since March 2021, right around when the country’s inflationary woes first began.

The country’s inflation has been gradually cooling in response to the Federal Reserve’s aggressive interest rate hikes. The Fed has raised rates by a large degree since last March, with the target rate now 5% to 5.25%.

The Fed paused rate-hiking last month for the first time since its tightening cycle began, although officials were keen to indicate that the pause was expected to be temporary and penciled in the possibility of two more rate revisions by the end of the year.

President Joe Biden has touted the recent declines in inflation as proof that his “Bidenomics” agenda has been working, although Republican critics contend that Biden shoulders some of the blame for inflation taking off in the first place given large infusions of federal spending at the start of his presidency.

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Biden has sought to emphasize the bright spots in the economy, namely the robust labor market, which while starting to show some signs of softening, has defied expectations in the face of the Fed’s tightening.

The economy added 209,000 jobs in June, the Bureau of Labor Statistics reported last week. While still strong, that was below forecast expectations of 225,000, and it was the first report in months that came in below the consensus prediction. It was also the slowest pace of job growth since December 2020.