Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand fell 0.1% in August 2022 (seasonally adjusted), following the 0.4% decrease in July. The index for final demand goods fell 1.2% in August, while the index for final demand services grew 0.4% after a 0.2% increase in July. Forty percent of the increase in prices for final demand services can be attributed to margins for fuels and lubricants retailing, which rose 14.2 percent.

Figure 1 shows the PPI for materials and components of construction, with the three-month moving average (3MMA) on the left-hand axis and monthly percent change of the 3MMA on the right. August’s 3MMA was 351.50, representing a change of +0.13% month over month (3MMA m/m). The 3MMA has been steadily increasing since the beginning of the year.

Figure 2 shows the PPI for materials and components of manufacturing, with the 3MMA on the left-hand axis and monthly percent change of the 3MMA on the right. August’s 3MMA was 248.11 representing a change of -0.80% m/m. The 3MMA is reversing trend after steadily increasing since the beginning of the year.

At Gerdau, we monitor the PPI – issued monthly by the U.S. Bureau of Labor Statistics – because it is an unbiased, reliable measure of inflation. The PPI can better inform business decisions by providing a framework for contract adjustment, forecasting, inventory valuation, and as an overall economic indicator.