Wholesale prices unexpectedly fell in March, setting up a favorable inflation backdrop as President Donald Trump began intensifying tariffs against U.S. trading partners, the Bureau of Labor Statistics reported Friday.

The producer price index, considered a leading indicator for pipeline inflation pressures, declined a seasonally adjusted 0.4% for the month, after rising 0.1% in February. Economists surveyed by Dow Jones had been looking for an increase of 0.2%.

Excluding food and energy, so-called core PPI also declined, down 0.1% against the estimate for a 0.3% increase. The index less food, energy and trade services increased 0.1%.

More than 70% of the slide in final demand prices came from a 0.9% tumble in goods prices, a key measure as policymakers look for inflation drivers. Services prices also pulled back, falling 0.2%.

Nevertheless, the indicators showed inflation still holding above the Federal Reserve’s 2% target.

Headline PPI showed a 2.7% 12-month rate while the index excluding food, energy and trade services was at a 3.4% rate.

Moreover, March inflation measures will be considered somewhat stale considering the uncertainty behind Trump’s trade policy. The president slapped a broad 10% levy against all imports while also revealing a menu of individual duties against dozens of other trading partners. Trump on Wednesday backed off what he termed “reciprocal” tariffs, instituting a 90-day negotiation period in an effort to reduce the U.S. trade deficit.

The BLS on Thursday also reported that consumer prices pressures were easing, down 0.1% for a headline rate of 2.4% and a core reading of 2.8% that was the lowest in four years.

This is breaking news. Please check back for updates.

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