WASHINGTON: Falling food and energy prices helped keep US wholesale inflation flat in May, in another sign of slackening price pressures, the Labor Department reported Tuesday.

The new figures come as the US central bank begins a two-day monetary policy meeting, with the Federal Reserve widely expected to raise the key interest rate for the second time this year despite signs of a cooling economy, reports AFP.

Policymakers said last month they believed the weakness in the economy likely was "transitory" and a rate hike would be appropriate "soon," although they also promised to wait for confirmation the recovery has resumed before increasing the benchmark lending rate.

The Producer Price Index, which measures input costs from the seller's perspective, was unchanged in May, down sharply from April's 0.5 percent jump.  The result matched analyst expectations.

For the latest 12 months, PPI was up 2.4 percent, down a tenth of a percentage point from last month's reading.

Energy prices continued to see sharp declines, dropping three percent, as gasoline prices plunged 11.2 percent, the largest drop since February 2016.

Food prices meanwhile fell 0.2 percent in the month.

Car prices also posted a big decline, amid flagging car sales, falling 1.4 percent from April.

"The drop in new car sales in recent months clearly has worried automakers, who have responded with the biggest one-month price cut since July 2009," Ian Shepherdson of Pantheon Macroeconomics said.

However, services showed persistent signs of rising prices, up 2.1 percent compared to May 2016, the largest increase in two and a half years.

Excluding the more volatile categories food, fuel and trade services, PPI slipped 0.1 percent for the month, while the 12-month rate was up 2.1 percent, unchanged from last month.

Shepherdson said costs for services were driving up "core" PPI, excluding food and fuel, which gained 0.3 percent for the month and was up 2.1 percent over May 2016.

Core goods and services prices are trending higher, he said in a research note, and while "Neither are yet very alarming ...further sustained increases would be unwelcome."

The May consumer price report is due out Wednesday, which last month showed a 12-month rate of 2.2 percent, two-tenths below PPI.

Chris Low of FTN Financial said, "There is plenty of leeway for wholesale prices to rise faster than consumer prices. In the past, the PPI has run well above and well below the CPI for years at a time."

Among the notable results, guestroom rentals saw the biggest monthly decline since the Labor Department began tracking them in 2009, falling 5.2 percent for the month.