A measure of underlying US inflation cooled in April for the first time in six months, indicating price pressures are abating gradually and supporting the Federal Reserve’s intent to cut interest rates later this year.

The so-called core consumer price index, which excludes food and energy costs, increased 0.3% from March, according to government data out Wednesday. From a year ago, it advanced 3.6%.

Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.3% from the prior month and 3.4% from a year ago, Bureau of Labor Statistics figures showed. Shelter and gasoline accounted for over 70% of the increase, the BLS said in the report.

While the figures may offer the Fed some hope that inflation is resuming its downward trend, officials will want to see additional readings to gain the confidence they need to start thinking about cutting interest rates. Chair Jerome Powell said Tuesday the central bank will “need to be patient and let restrictive policy do its work,” and some policymakers don’t expect to cut rates at all this year.

Treasury yields tumbled, S&P 500 index futures rose and the dollar weakened. Traders boosted the odds of a September rate cut to about 60%.

The central bank is trying to rein in price pressures by weakening demand across the economy. Separate data out Wednesday showed retail sales stagnated in April, indicating high borrowing costs and mounting debt are encouraging greater prudence among consumers.

In addition to shelter, the advance in the CPI was driven once again by services like car insurance and medical care. Apparel prices rose by the most since June 2020.

This article was provided by Bloomberg News.