NEW YORK — U.S. producer prices unexpectedly declined in June, marking the first monthly drop in nearly a year as lower energy costs eased wholesale inflationary pressures, according to data released Wednesday by the U.S. Bureau of Labor Statistics.

The Producer Price Index (PPI) fell 0.3% from May, compared with economists' expectations for no monthly change. On an annual basis, producer prices increased 5.5%, slowing from 6.5%in May.

Core PPI, which excludes the more volatile food and energy categories, rose 4.7% year over year and 0.2% month over month, both coming in below market expectations.

The report followed Tuesday's softer Consumer Price Index (CPI) data, reinforcing signs that inflationary pressures in the U.S. economy are beginning to moderate.

Following the release, spot gold prices climbed nearly $20 as investors increased expectations that the Federal Reserve could maintain its current interest rate policy.

Analysts said the decline in wholesale inflation was largely driven by lower energy prices. Expectations of potential U.S.-Iran negotiations helped push overall energy prices down 6.4%in June, while wholesale gasoline prices fell approximately 12%.

Supply chain pressures also continued to ease. Food prices declined for the first time in four months, while transportation and warehousing costs moderated despite ongoing pressure from higher trucking expenses and labor shortages.

Despite the encouraging inflation data, Federal Reserve officials remain cautious.

Fed Chair Kevin Warsh told lawmakers it is still "too early" to declare victory over inflation, while New York Fed President John Williamssaid inflation has likely peaked but remains well above the central bank's 2% target. Williams projected inflation may not return to target until 2027.

The latest PPI report strengthened market expectations that the Federal Reserve will leave interest rates unchanged at its July policy meeting.

At the same time, the broader U.S. economy continues to show resilience. A separate report from the New York Fed indicated manufacturing activity rebounded in July, with new orders, shipments, and employment all improving.

However, economists cautioned that the outlook remains uncertain. Renewed tensions in the Strait of Hormuz have already pushed energy prices higher this week. Because producer prices often serve as a leading indicator for consumer inflation, another surge in energy costs driven by geopolitical tensions could quickly reverse June's progress in slowing inflation.