What is the producer price index?
A producer price index measures changes in prices received by producers for specified outputs.
Definition, calculation and mechanism
Producer prices cover a different mix of goods, taxes and services than consumer baskets. Inputs, exchange rates and energy can affect the index. A producer-price increase does not always pass through to consumers immediately or fully.
Interpretation, examples and limits
Read scope, weights and monthly versus annual comparisons. Margins, competition, contracts and demand shape pass-through. It is not a certain forecast of next month’s consumer inflation.
Related topics
What is monetary policy?What is the labor force participation rate?What is a tariff?What is productivity?What is a stock exchange?What is purchasing power?What is inflation?What is an investment fund?What is a bond?What is a bank deposit?What is asset allocation?What is a recession?What are open market operations?What is an indirect tax?EconomicsWhat are supply and demand?What is interest?What are inflation expectations?What is an investment management fee?What is the consumer price index?What is an emergency fund?What is stagflation?What is the primary fiscal balance?What is an exchange rate?What is gross domestic product (GDP)?What is an altcoin?What is fiscal policy?What is cryptocurrency?What is unemployment?What is the real interest rate?What is money supply?What is an investment time horizon?What are foreign exchange reserves?What is economic growth?What is public debt?What is tax incidence?What is the real effective exchange rate?What is financial literacy?What is Bitcoin?What is the balance of payments?What is portfolio rebalancing?What is bank capital?What is a tax base?What are reserve requirements?What is foreign trade?What is bank liquidity risk?What is the employment rate?What is the relationship between risk and return?What is market capitalization?What is deflation?