Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand decreased 0.5% in March 2023 (seasonally adjusted), following no change in February. The index for final demand goods fell 1.0% in March, while the index for final demand services moved down 0.3%, the largest decline since April 2020. Eighty percent of the March decline in the index for final demand goods can be traced to an 11.7-percent drop in prices 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. March’s 3MMA was 350.02, representing a change of +0.18% month over month (3MMA m/m). The 3MMA has reversed trend after steadily decreasing since October 2022.

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. March’s 3MMA was 236.55 representing a change of -0.08% m/m. The 3MMA has been steadily decreasing since August 2022.

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.