Producer Price Index

Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased 0.4% in September 2022 (seasonally adjusted), following the 0.2% decrease in August. The index for final demand goods increased 0.4% in September, while the index for final demand services grew 0.4% after a 0.3% increase in August. Over a quarter of the September increase in the index for final demand services can be traced to a 6.4-percent advance in prices for traveler accommodation services.

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. September’s 3MMA was 351.81, representing a change of +0.07% month over month (3MMA m/m). The 3MMA has been steadily increasing since the beginning of the year.

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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. September’s 3MMA was 245.44 representing a change of -1.07% m/m. The 3MMA has been consistently decreasing for the last two months.

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.

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