The Producer Price Index (PPI), which measures inflation on the wholesale level, rose by a greater than expected 0.7% in January. On a year-over-year basis, PPI decreased from an upwardly revised 6.5% to 6%. Core PPI, which strips out volatile food and energy prices, rose to a hotter than expected 0.5%. On an annual basis, Core PPI declined from an upwardly revised 5.8% to 5.4%.

What’s the bottom line? These inflation readings were disappointing because they were higher than expected, but inflation is still subsiding and the annual readings are moving lower in the right direction. In fact, the progress made on the producer side of inflation is notable. At its peak last March, PPI was at 11.6% year over year and is now almost half that amount at 6%.