A government report released Thursday showing an unexpected decline in consumer prices last month provided a second piece of critical evidence in as many days that inflation was cooling off and bolstered calls for federal policymakers to reduce interest rates sooner than later. 

The Producer Price Index (PPI) issued by the U.S. Bureau of Labor Statistics found that final demand prices declined 0.2% in May, down from an increase of 0.5% in April and beating Wall Street projections of a 0.1% increase in monthly wholesale inflation. The index measures the prices manufacturers receive in the marketplace for the goods and services they produce.

Core PPI, which measures final demand prices excluding food and energy, was unchanged last month, according to the report – the figure also beat analysts’ projections of a 0.2% increase. 

Gold and silver continued to struggle after the data was released. Gold was down $15.70 in late morning trading at $2,304 per ounce and silver fell $0.91 to trade at around $29.

Thursday’s PPI data was the second indicator this week suggesting inflation was retreating. The Consumer Price Index released Wednesday by the BLS declined to a 3.3% annual rate in May from a year earlier, down from 3.4% in April. 

The encouraging CPI report was issued just hours ahead of the Federal Open Market Committee meeting, where policymakers voted unanimously to leave interest rates unchanged in favor of more data showing the economy was truly getting closer to reaching the 2% inflation target set out by federal officials. The Fed indicated Wednesday that it would make one rate cut in 2024 instead of the three it planned earlier this year.

The Department of Labor also released its weekly jobless claims report on Thursday, which showed there were 242,000 initial claims for state unemployment benefits for the week ending June 8. The figure represented an increase of 13,000 from the previous week’s total of 229,000 claims. Economists had projected around 225,000 claims.