Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased 0.2% in August 2024 (seasonally adjusted), after remaining flat in July. The index for final demand goods remained unchanged in August, while the index for final demand services rose 0.4% in August. A 4.8-percent rise in the index for guestroom rental was a major factor in the August advance 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. August’s 3MMA was 354.10, representing a change of -0.03% month over month (3MMA m/m). The 3MMA has been steadily decreasing consecutively for the last two months.

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 233.89 representing a change of +0.09% m/m. The 3MMA has been steadily increasing consecutively for the last three 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.