U.S. wholesale prices fell last month in another sign that inflationary pressures are easing. But President Donald Trump�s trade wars cloud the outlook.

The Labor Department said Friday that its producer price index � which tracks inflation before it hits consumers � fell 0.4% from February, first drop since October 2023. Compared with a year earlier, producer prices rose 2.7%, down from a 3.2% year-over-year gain in February and much lower than the 3.3% economists had forecast. Gasoline prices fell 11.1% from February and egg prices, which had skyrocketed because of bird flu, plummeted 21.3%.

Excluding volatile food and energy prices, so-called core wholesale inflation fell 0.1% from February, the first drop since July. Compared to a year earlier, core producer prices were up 3.3% and lower than economists had forecast.

The report comes a day after the Labor Department delivered good news on inflation at the consumer level. Its consumer price index rose just 2.4% last month from March 2024, the smallest year-over-year gain since September. Core consumer prices posted the smallest year-over-year increase in nearly four years.

The inflation outlook is muddied by Trump�s trade wars. He�s imposing a 145% tax � a tariff � on Chinese imports and is hitting most of the rest of the world�s imports with a 10% levy that might go up after 90 days.

The trade barriers are widely expected to raise prices as importers attempt to pass along their higher costs.

(AP)