Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased 0.1% in July 2024 (seasonally adjusted), after increasing 0.2% in June. The index for final demand goods increased 0.6% in July, the largest advance since February, while the index for final demand services fell 0.2% in July, the largest decrease since March 2023. Nearly 60 percent of the broad-based increase in July can be traced to the index for final demand energy, which moved up 1.9 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. July’s 3MMA was 354.33, representing a change of -0.08% month over month (3MMA m/m). The 3MMA has reserved trend after slightly increasing last month.

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. July’s 3MMA was 233.49 representing a change of +0.12% m/m. The 3MMA has been steadily increasing consecutively 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.