Good morning. Once a month the government prints what US producers charge, the earliest official read on the costs rolling toward your invoices. The July print looks boring on the surface: flat. Open the tables and it is anything but. The construction line posted its biggest move of the year, and the tariff-exposed materials split in two.
Top story — Producer prices went flat. Construction went up 2.2% in a month.
The Producer Price Index for final demand was unchanged in July, seasonally adjusted, and the 12-month rate cooled to 4.7% from 5.5% in June (BLS, Producer Price Indexes, July 2026, USDL 26-1380). But the line that prices your world broke the other way. Final demand construction rose 2.2% on the month, after months of 0.1% moves, and is up 5.2% for the 12 months ended July, accelerating from 3.5% in the year ended June (BLS Table 1). It was broad: new office building construction up 2.5%, industrial 2.4%, warehouse and school 2.2%, health care 1.9% on the month (BLS Table 2). Core producer prices, less foods, energy and trade services, rose 0.4%. What builders and subs charge is repricing upward even while the headline says calm. If you bid against general contractors, or buy from anyone who does, the cost floor under nonresidential work just stepped up.
Quick hits
The metals split in two. Steel mill products rose 3.9% in July, a fourth straight monthly rise and the biggest yet, now up 22.5% over the year. But copper and brass mill shapes fell 2.9% on the month, still up 18.4% on the year, and aluminum mill shapes fell 1.6%, still up 40.5% (BLS Table 2; these metals monthlies are not seasonally adjusted). Under the standing 50% Section 232 metals tariffs, domestic steel producers are still pushing price while copper and aluminum took their first real breather in months.
Lumber woke up. Softwood lumber jumped 8.2% in July, the biggest monthly move of 2026 on that line, and is up 15.0% over the year; the broader lumber index rose 5.0% (BLS Table 2). If you frame, deck or re-roof, that line hits your next quote.
This was the before photo. The 50% tariff on Canadian building materials, covering cement, plywood, doors and paint, took effect on 19 August, six days after this print, so July is the last clean pre-tariff read. The first print with the tariff inside it is the August PPI, out on 10 September. Meanwhile gasoline fell 5.7% and diesel 6.7% on the month, real relief, though the yearly lines are still brutal at 37.1% and 44.2% (BLS Table 2).
The Tip — Put an escalation clause in every bid that outlives a month
The consumer print two days before this one showed inflation cooling: CPI up just 0.1% in July, 3.4% on the year (BLS, Consumer Price Index, July 2026). Read the pair honestly. Your customers’ willingness to absorb price rises is cooling while your input floor, construction 5.2%, steel 22.5%, lumber 15%, is rising. That is a margin squeeze with a government timestamp. The move this week: pull your three biggest open bids and check the dates. Anything that runs past 30 days gets a materials-escalation clause tied to the actual PPI line for your inputs, steel, lumber or copper, or a firm price with a 15-day acceptance window. Fixed-price quotes written in July math are the ones the August tariffs eat.
Tool watch — [Not sponsored]
The BLS PPI release page is free, public and drops mid-month, every month. The next one lands 10 September. Skip the headline and go straight to Table 2 to find your lines: steel mill products, copper and brass mill shapes, softwood lumber, and the construction rows. Five minutes a month and you are pricing off the same data the big general contractors use. No one paid for this mention.
That’s the callout. See you next time.
Sources: BLS — Producer Price Indexes, July 2026, USDL 26-1380 · BLS PPI Table 1 — final demand construction · BLS PPI Table 2 — commodity detail · BLS — Producer Price Indexes, June 2026 · BLS — Consumer Price Index, July 2026 · Proclamation 11032 of 1 June 2026, 91 FR 34085 — Section 232 metals rates