Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand grew 1.4% in March 2022 (seasonally adjusted), following the 0.9% increase in February. The index for final demand goods grew 2.3% in March, while the index for final demand services increased 0.9%. Leading the March increase in the index for final demand goods, diesel fuel prices jumped 20.4 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. March’s 3MMA was 339.53, representing a change of +2.11% month over month (3MMA m/m). The 3MMA slightly dipped this month after steadily rising 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. March’s 3MMA was 240.84, representing a change of +0.55% m/m. The 3MMA for manufacturing slightly dipped last month but is steadily rising again.

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.