Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased 0.3% in January 2024 (seasonally adjusted), after decreasing 0.1% in December. The index for final demand goods moved down 0.2% in January, the fourth consecutive decline, while the index for final demand services moved up 0.6%, the largest increase since July 2023. A 2.2-percent increase in the index for hospital outpatient care was a major factor in the January rise in prices for final demand 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. January’s 3MMA was 353.65, representing a change of +0.20% month over month (3MMA m/m). The 3MMA has been steadily increasing since July.

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. January’s 3MMA was 231.50 representing a change of +0.01% m/m. The 3MMA has reversed trend after steadily decreasing since August 2022.

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.