U.S. producer prices fell in February on lower energy and food costs, but prices were unchanged from a year ago, suggesting the downward trend was near an end.
A separate report showed factory activity expanded in March for the first time since last summer, and measures of new orders and shipments also posted robust gains.
The Labor Department said on Tuesday its producer price index dropped 0.2 percent last month after edging up 0.1 percent in January. In the 12 months through February, the PPI was unchanged after falling 0.2 percent in January.
It was the first time since January 2015 that the year-on-year PPI did not decline. Economists polled by Reuters had forecast the PPI dipping 0.2 percent last month and gaining 0.1 percent from a year ago.
With the dollar losing some momentum after gaining 20 percent against the currencies of the United States' main trading partners between June 2014 and December 2015, imported deflation is starting to wane. That could curb further declines in producer prices.