CNN — 

Inflationary pressures eased at the wholesale level last month, another indication of a strong economy before the bulk of President Donald Trump’s aggressive trade policies kicked in.

The Producer Price Index, a closely watched measurement of wholesale inflation, showed that the prices paid to producers fell 0.4% in March from the month before, when prices rose 0.1%; and slowed on an annual basis to 2.7% from 3.2%, according to Bureau of Labor Statistics data released Friday.

Economists were expecting monthly prices to rise by 0.2% and to accelerate to 3.3% on an annual basis.

PPI, which measures the average change in prices received by producers of goods and services, serves as a potential bellwether for retail-level inflation in the months ahead. This index also is being scrutinized to glean insight as to the initial impacts of Trump’s sweeping new and proposed tariffs.

On Thursday, the latest Consumer Price Index data showed that overall inflation cooled for the goods and services Americans commonly purchase. But tariffs and a quickly escalating trade war with China are expected to result in some price increases for consumers.

Energy prices dragged down the overall PPI, Thursday’s data showed, as they did in CPI. The energy for final demand index sank 4% for the month.

Energy prices typically move higher this time of year; however, they moved lower last month because of a supply-demand imbalance as well as recession concerns weighing on crude oil prices.

Wholesale food prices also dropped last month, falling 2.1%.

Excluding food and energy, categories that tend to be highly volatile, core PPI fell 0.1% from February (when it rose 0.1%), bringing the annual increase to 3.3%, its lowest rate since September.

This story is developing and will be updated.