Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased 0.3% in November 2022 (seasonally adjusted), following the 0.3% increase in October. The index for final demand goods inched up 0.1% in November, while the index for final demand services grew 0.4% after a 0.1% increase in October. About one-third of the November rise in the index for final demand services can be traced to prices for securities brokerage, dealing, investment advice, and related services, which jumped 11.3 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. November’s 3MMA was 350.53, representing a change of -0.32% month over month (3MMA m/m). The 3MMA has been steadily decreasing since September.

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. November’s 3MMA was 240.50 representing a change of -0.77% m/m. The 3MMA has been consistently decreasing since July.

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.