Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand increased 0.1% in June 2023 (seasonally adjusted), following the 0.4% decrease in May. The index for final demand goods remained flat in June, after decreasing 1.6 percent in May, while the index for final demand services moved up 0.2%. Within the index for final demand goods in June, prices for gasoline rose 3.4 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. June’s 3MMA was 350.63, representing no change month over month (3MMA m/m). The 3MMA has been steadily increasing since March.

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. June’s 3MMA was 235.79 representing a change of -0.23% 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.