Definition
The PPI tracks prices at different stages of production for goods and services.
Political Dictionary
Producer Price Index
The Producer Price Index measures price changes received by domestic producers.
Why It Matters
It can provide early information about cost pressures before they reach consumers.
How It Works
Agencies survey producer prices and construct weighted indexes.
History
Producer-price measurement developed alongside industrial and national economic statistics.
Example
Rising input prices may appear in the PPI before consumer prices increase.
Common Misconceptions
- The PPI measures only farm products.
- It is identical to the CPI.
- A higher PPI always produces equal consumer inflation.
Related Terms
- PPI
- Consumer Price Index
- Inflation
- Supply Chain
- Prices
Related Topics
See Also