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Definition

Producer Price Index (PPI)

The Producer Price Index (PPI) is an economic measurement of the average change in prices that domestic producers of goods receive for their products in a given country or region.

PPI is a metric used in economics to help define inflation rates; it is one of many price indices, like the Consumer Price Index (CPI), that collectively define the cost of living.

The PPI is compiled and published by the United States Bureau of Labor Statistics and is one of the oldest economic time series recorded by the federal government. Previous to 1978, PPI was called the Wholesale Price Index (WPI), originating from an 1891 U.S. Senate resolution.

Data for the PPI is gathered by systemic sampling of producers and published monthly on a confidential, volunteer basis from producers. Volatile prices such as those in the energy sector are often ignored to keep the index more stable.

This was last updated in July 2016

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