This key US inflation gauge fell last month by the most since 2020

US wholesale inflation cooled off in October, reversing a three-month trend that had seen the cost of energy push up prices, according to data released Wednesday by the Bureau of Labor Statistics.

The Producer Price Index, which measures the average price changes that businesses pay to suppliers, fell 0.5% on a monthly basis. It’s the largest monthly drop since April 2020, when the rapidly spreading Covid-19 virus caused a sharp economic contraction.

October’s decline also marks a sharp turnabout from the 0.4% monthly jump in September, when food and energy prices raised the cost of goods: Energy prices fell 6.5% in October from the previous month, with gasoline sinking 15.3%, contributing to a 1.4% drop in goods inflation.

On an annual basis, PPI rose 1.3% for the 12 months ended in October, down from a 2.2% yearly increase in September.

Economists expected PPI to inch up 0.1% from September and rise 1.9% from last year, according to Refinitiv estimates.