Producer Price Index (PPI)

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Producer Price Index (PPI) Empty Producer Price Index (PPI)

Post  Admin on Wed May 03, 2017 7:35 am

The PPI is one of the two basic ways to measure inflation (the other one is the CPI). The index measures the price of goods at the wholesale level. So, while the CPI tracks the cost paid for goods by consumers, the PPI shows how much the producers are getting for the goods. There are three types of goods measured by the PPI: crude, intermediate, and finished goods.

Crude goods are raw materials used in production of something else, intermediate goods are components of a larger product, and finished goods are what is actually sold to a reseller. The finished goods data are the most closely watched since they are the best gauge of what consumers will actually have to pay.

The Core PPI is a measurement of prices assessed by producers of goods and services, factoring out the items that fall under the food and energy category.

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