The Producer Price Index (PPI) measures prices at the producer level (the cost of raw materials to companies that produce goods). PPI is a family of indexes that measures the average change in selling prices received by domestic producers of goods and services over time. PPIs measure price change from the perspective of the seller.
The market is interested in 2 things contained in the PPI report: how fast the prices are rising and whether producers are passing along any price increases to the consumers.
The PPI looks at three areas of production: industry-based, commodity-based, and stage-of-processing-based companies.
Also see the Consumer Price Index.
