U.S. producer price inflation (PPI) fell to its lowest level in more than a year in October, bolstering hopes that inflationary pressures have peaked thanks to improvements in global supply chains in recent months.

Producer prices rose 8.0% from a year earlier, well below the consensus forecast of 8.3%.

The U.S. Bureau of Labor Statistics also revised downward its estimate of producer prices in September, showing an increase of just 0.2%, rather than the previously reported 0.4%.

The core producer price index, meanwhile, was even calmer when the volatile food and energy components were set aside. Prices were unchanged this month, pushing the annual= rate down to 6.7%, the lowest level since last August.

In contrast, prices received by food and energy producers rose 0.5% and 2.7%, respectively.

These indicators are in line with growing signs of easing inflationary pressures in the US economy. As such, they support the idea expressed by Fed Deputy Governor Lael Brainard on Monday that the central bank could “soon” slow the pace of its interest rate hikes, after raising it by 75 basis points at each of the last 4 meetings.

On the news, U.S. stock market futures jumped more than 1%, while the dollar and bond yields fell 10 basis points as the market assessed the Fed’s more dovish approach.

Massive disruptions in seaborne trade caused global shortages of components and other intermediate goods earlier this year, forcing automakers and other companies to limit production and raise prices. In recent months, however, those soybeans have largely been eliminated.

The data show a marked decline in profit margins across the economy as overall activity has slowed. In particular, margins earned on final demand services fell 0.5%, leading to the first monthly decline in prices for these services in 2 years. This was partly driven by lower fuel costs as well as lower prices for transportation and warehousing services.

Expanding profit margins have been the main driver of the inflation shock this year, and only recently have there been signs of it reversing. Even in recent weeks, margin pressure has been more evident in corporate activity, where various companies – notably Facebook owner Meta Platforms* (NASDAQ:META), Snap (NYSE:SNAP) and reportedly Amazon (NASDAQ:AMZN) – have announced or prepared drastic job cuts to protect or restore their profitability.