The producer price index increased 0.2% in August, the Bureau of Labor Statistics said Thursday. The year-over-year increase narrowed to 1.7% from 2.2% a month ago.

In line with estimates, the wholesale prices showed that some areas remain elevated, but inflation is slowing, which should dampen price pressures moving forward.

With the inflation rate getting nearer to the Federal Reserve’s 2% annual goal, the odds of an interest rate cut is favorable, which would be the first time since the pandemic.