Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand grew 0.8% in May 2022 (seasonally adjusted), following the 0.4% increase in April. The index for final demand goods grew 1.4% in May, while the index for final demand services grew 0.4% after a 0.2% decrease in April. Forty percent of the May increase in prices for final demand goods can be attributed to an 8.4 percent advance in the index 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. May’s 3MMA was 349.14, representing a change of +1.06% month over month (3MMA m/m). The 3MMA has been steadily increasing since the beginning of the year.

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. May’s 3MMA was 246.26 representing a change of +2.11% m/m. The 3MMA has been steadily increasing after a slight dip in February.

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.