Producer Price Index (PPI)

Discipline: Economics

Producer Price Index (PPI) is a measure used to monitor the inflation in a given economy.

The index value is calculated with the average wholesale prices of raw, semi-finished, and finished goods. Changes in the producer price index (ppi), and especially those in some of its indicative sub-indices, therefore, predict the changes in the consumer price index (cpi). However, it should be also taken into consideration that producer price indices, by nature, cannot include price levels/changes in the services industry.

In the United States, the Bureau of Labor Statistics of the Department of Commerce releases the Consumer Price Index data on a monthly basis.

Also see: consumer price index (cpi), inflation

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