WASHINGTON (AP) — U.S. wholesale prices fell sharply last month as inflationary pressure continued to ease in the face of a year and a half of higher interest rates.

The Labor Department reported Wednesday that its producer price index — which measures inflation before it hits consumers — dropped 0.5% in October from September, biggest drop since April 2020. On a year-over-year basis, producer prices were up 1.3% from October 2022, smallest gain since July.

Excluding volatile food and energy costs, so-called core consumer prices were unchanged from September to October and rose 2.4% from a year earlier.

The wholesale price of goods fell 1.4% from September to October, pulled down by a 15.3% drop in the price of gasoline. Services prices were unchanged.

Inflation last year reached heights not seen in four decades, prompting the Fed to raise its benchmark 11 times since March 2022.

In the face of higher borrowing costs, inflation has decelerated sharply. On Tuesday, the Labor Department reported that consumer prices were unchanged from September to October and up 3.2% from a year earlier — smallest year-over-year increase since June. But inflation is still coming in above the Fed's 2% target.

Despite higher interest rates, the U.S. economy and job market have remained resilient. The combination of a sturdy economy and decelerating inflation has raised hopes that the Fed can manage a so-called soft landing — raising rates just enough to tame inflation without tipping the economy into recession.

The Fed hasn't raised its benchmark rate since July, and many economists believe its rate-hike campaign is over.