Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased 0.2% in October 2024 (seasonally adjusted), after advancing 0.1% in September. The index for final demand goods inched up 0.1% in October, while the index for final demand services rose 0.3% in October. Over one-third of the rise in the index for final demand services can be traced to prices for portfolio management, which advanced 3.6 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. October’s 3MMA was 354.88, representing a change of 0.20% month over month (3MMA m/m). The 3MMA has been steadily increasing 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. October’s 3MMA was 233.96 representing a change of +0.08% m/m. The 3MMA reversed trend after steadily decreasing 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.