Wholesale inflation in the United States slowed in June as lower energy prices helped reduce production costs, offering temporary relief after months of rising inflation.

New data released by the US Bureau of Labor Statistics showed that the Producer Price Index (PPI), a key measure of prices received by producers, fell by 0.3 per cent in June compared with the previous month. On a yearly basis, producer prices rose by 5.5 per cent, lower than the 6.0 per cent annual increase recorded in May.

The decline was largely driven by a sharp drop in energy prices. Wholesale gasoline prices fell significantly during the month, while diesel, jet fuel and other petroleum products also recorded notable declines, helping to ease overall inflationary pressures.

The lower energy costs came after a temporary easing of tensions in the Middle East, which had previously pushed global oil prices higher following disruptions to energy supplies.

However, analysts say the improvement may not last. Fresh fighting in the region has already sent oil prices climbing again, raising concerns that higher fuel costs could increase inflation in the months ahead.

Samuel Tombs, Chief US Economist at Pantheon Macroeconomics, described the latest inflation figures as encouraging but warned that it will take time to determine how rising energy prices will affect consumers. He added that prices for many finished consumer goods are still expected to increase.

Nationwide economist Oren Klachkin also cautioned that the recent rebound in global oil prices could reverse June’s gains, keeping pressure on consumer inflation through the second half of the year.

The latest producer inflation report follows separate data released a day earlier showing that consumer inflation also eased in June before renewed tensions in the Middle East began pushing energy prices higher once again.