Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand decreased 0.5% in December 2022 (seasonally adjusted), following the 0.2% increase in November. The index for final demand goods moved down 1.6% in December, while the index for final demand services edged up 0.1% after a 0.2% increase in November. Nearly half of the December decrease in the index for final demand goods can be traced to a 13.4-percent decline in prices for gasoline.

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. December’s 3MMA was 349.59, representing a change of -0.30% month over month (3MMA m/m). The 3MMA has been steadily decreasing since October.

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. December’s 3MMA was 238.32 representing a change of -0.70% m/m. The 3MMA has been consistently decreasing since August.

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.