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Finance Dictionary and Glossary of Investment Terms
Producer Price Index (PPI)
Index measuring changes in wholesale prices, published by the U.S. Bureau of Labor Statistics every month.
A government index that measures prices of goods at the wholesale level. There are three broad subcategories within PPI: crude, intermediate, and finished. The market tracks the finished goods index most closely, as it represents prices for goods that are ready for sale to the end user. Goods prices at the crude and intermediate stages of production often provide an indication of coming (dis)inflationary pressures, but the closer you get to crude goods, the more that these prices track commodity prices which are already available in traded indexes such as the CRB (Commodity Research Bureau). At all stages of production, the market places more emphasis on the core rate, the PPI excluding food and energy. Food and energy prices tend to be quite volatile and obscure trends in the underlying inflation rate. Though the market reaction is determined by the month/month changes, analysts also note year/year changes. The index is not revised on a monthly basis, but annual revisions to seasonal adjustment factors can produce small adjustments to past releases. The corresponding index for consumer goods is the Consumer Price Index.Importance (A-C): This release merits a B-. Source: Bureau of Labor statistics, U.S. Department of Labor. Release Time: Around the 11th of each month at 8:30 ET for the prior month. Raw Data Available At: http://stats.bls.gov/news.release/ppi.toc.htm.