WASHINGTON (AP) — Wholesale prices in the United States dropped 0.3% from April to May, another sign that inflationary pressures continue to ease in the face of repeated interest rate hikes by the Federal Reserve.

The Labor Department’s producer price index — which measures inflation before it reaches consumers — rose 1.1% last month from May 2022, it said Wednesday, the smallest year-over-year gain since December 2020.

On a month-to-month basis, overall producer prices have now dropped three of the last four months. In May, wholesale inflation was pulled down by a 13.8% drop in gasoline prices.

Excluding volatile food and energy prices, so-called core wholesale inflation was up 0.2% last from April and 2.8% from a year earlier, the mildest gain since February 2021.

Unleashed by an unexpectedly strong economic recovery from 2020′s COVID-19 recession, inflation began to rise in 2021 and last year reached levels not seen since the early 1980s. In response, the Fed has raised its benchmark interest rate 10 times in the past 15 months. At their meeting Wednesday, Fed policymakers are expected to leave the rate alone to give themselves time to assess the impact the aggressive rate hikes have had on the economy.

Inflation has been receding. Year-over-year increases in producer prices peaked at 11.7% in March 2022 and have fallen 11 straight months.

On Tuesday, the Labor Department said that its consumer price index rose just 0.1% last month from April and 4% from May 2022 — the lowest 12-month figure in two years and down from a 4.9% increase in April. Inflation in consumer prices is still running ahead of the Fed’s 2% year-over-year target.

The April-to-May drop in producer prices beat the 0.1% slide that economists had forecast.

“Producer prices have downshifted sharply and core PPI is steadily moving towards the 2% target,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “Overall, the inflation data support a hold in policy at today’s (Fed) meeting.’’