Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand grew 0.5% in April 2022 (seasonally adjusted), following the 1.6% increase in March. The index for final demand goods grew 1.3% in April, while the index for final demand services remained the same after a 1.2% increase in March. Within the index for final demand services in April, prices for truck transportation of freight rose 4.4 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. April’s 3MMA was 344.81, representing a change of +1.44% month over month (3MMA m/m). The 3MMA has been steadily increasing since the beginning of the year.

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. April’s 3MMA was 242.64 representing a change of +0.73% m/m. The 3MMA has been steadily increasing after a slight dip in February.

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.