Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand grew 0.8% in November 2021 (seasonally adjusted), following the 0.6% increase in October. The index for final demand services grew 0.7% (its eleventh consecutive advance) while the index for final demand goods moved up by 1.2%. Within final demand goods in November, prices for iron and steel scrap rose 10.7%.

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 312.27, representing a change of +0.99% month over month (m/m). The 3MMA is rising again after experiencing a dip in 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 233.95, representing a change of +1.24% m/m. Unlike construction, the 3MMA for manufacturing declined this month.

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.