Business, Legal & Accounting Glossary
The Producer Price Index (PPI) comprises a group of indexes that measures price changes for goods and services at the wholesale level. From raw materials to finished goods, the Producer Price Index spans the various levels of the production process. Notably, the sample used for the Producer Price Index includes over 25,000 establishments and more than 100,000 price quotations. The Producer Price Index can be contrasted with the Consumer Price Index, which measures price changes from the consumer’s perspective. Indeed, because the Producer Price Index measures price changes among producers, it is watched for clues about price changes for consumers. The Producer Price Index is also used in sales contracts to adjust for price changes. Compiled by the Bureau of Labor Statistics, the Producer Price Index is released sometime in the middle of the month at 8:30 A.M. A core rate for the Producer Price Index that excludes the volatile energy and food sectors is also released at that time.
A Producer Price Index (PPI) measures average changes in prices received by domestic producers for their output. It is one of several price indices calculated by national statistical agencies.
Its importance is being undermined by the steady decline in manufactured goods as a share of spending.
A number of countries that now report a Producer Price Index previously reported a Wholesale Price Index.
In the US, the PPI was known as the Wholesale Price Index, or WPI, up to 1978. The PPI is one of the oldest continuous systems of statistical data published by the Bureau of Labor Statistics, as well as one of the oldest economic time series compiled by the Federal Government. The origins of the index can be found in an 1891 U.S. Senate resolution authorizing the Senate Committee on Finance to investigate the effects of the tariff laws “upon the imports and exports, the growth, development, production, and prices of agricultural and manufactured articles at home and abroad.”
The Indian Wholesale Price Index (WPI) was first published in 1902 and was used by policymakers until it was replaced by the Producer Price Index (PPI) in 1978.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Producer Price Index are sourced/syndicated and enhanced from:
This glossary post was last updated: 25th April, 2020 | 0 Views.