Description:

While the CPI focuses on prices paid by the end consumer, the PPI revolves around the price pressures (inflation) on business spending.

Released:

8:30 am the second week following the month being reported before the CPI

Calculation:

Like the CPI, the PPI is calculated through similar initiatives by the Bureau of Labor Statistics. The index is always calculated relative to a “base” year so inflationary movements can easily be traced year over year.

Key Point:

The PPI is a collection of indexes based on the three distinctive phases of the production cycle: PPI crude goods, PPI intermediate goods, and PPI finished goods.

PPI crude goods: cost of raw materials (wheat, cattle, coal, crude oil, timber)

PPI intermediate goods: cost of materials that have undergone processing (leather, paper)

PPI finished goods: the most important component of the PPI index because the PPI for finished goods most accurately reflects the prices that wholesalers and retailers will pay for manufactured goods; any price increase at this level could cause a rise in retail prices

Release site: Click here