Producer Price Index (PPI)

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    What is PPI (the Producer PriceWhat are value stocks? A value company is a company that app... More Index)?

    PPI (the Producer PriceWhat is price? The price is the measure of the value of goo... More Index) is designed to show the average change in the price that domestic manufacturers receive for their goods.

    PPI covers the initial commercial transaction for a range of products, with some services also being included. It is not indicative of the prices that end consumers have paid – that is covered by the Consumer Price Index (CPI).

    In the US and several other countries, PPI was previously known as the Wholesale Price Index (WPI).

    PPI reports are usually released on a monthly basis, with the core PPI figure expressed as a percentage.

    Why are investors interested in PPI?

    Investors pay attention to PPI reports because they show production trends and provide a good indicator of future CPI.

    If manufacturers begin to charge higher prices for their goods, that cost is likely to be passed on to the end consumer and CPI figures will be affected. And, because CPI is a leading indicator of inflation, investorsWhat are value stocks? A value company is a company that app... More will closely analyse preceding PPI reports to make predictions about CPI.