Producer Price Index (PPI)

The Producer Price Index (PPI) measures the average change in selling prices received by domestic producers for their output over time. It reflects the price changes from the perspective of the seller rather than the consumer. By tracking various industries, the PPI helps identify inflation trends before they reach consumers, offering insights into economic conditions. A rising PPI indicates increasing production costs, which can eventually lead to higher prices for consumers, while a falling PPI suggests the opposite. It is a valuable tool for economists, policymakers, and businesses to gauge economic health.