Producer Price Index

Producer Price Index: The U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) for final demand declined 0.2% in May 2024 (seasonally adjusted), after increasing 0.5% in April. The index for final demand goods decreased 0.8% in May, the largest decline since moving down 1.2 percent in October 2023 , while the index for final demand services was unchanged in May after increasing 0.6 percent in April. Nearly 60 percent of the May decrease in the index for final demand goods can be traced to a 7.1-percent decline in prices for gasoline.

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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. May’s 3MMA was 356.55, representing a change of +0.13% month over month (3MMA m/m). The 3MMA has been steadily increasing since July.

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. May’s 3MMA was 233.21 representing a change of -0.05% m/m. The 3MMA has reversed trend after steadily increasing since the beginning of 2024.

At ˽av, 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.

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