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PPI
(Producer Price Index)
PPI (Producer Price Index) measures wholesale price changes for domestic producers (inputs like raw materials), serving as a leading indicator for future CPI inflation.
Unlike CPI's consumer focus, PPI tracks three production stages: crude goods (e.g., iron ore), intermediate goods (steel coils), and finished goods (cars). The Fed monitors PPI for supply chain pressures—U.S. PPI spiked 11.7% YoY in March 2022 amid COVID disruptions. Manufacturers often pass PPI increases to consumers with a 3-6 month lag. The ECB's equivalent is the Industrial Producer Price Index (IPPI). Investors watch PPI-CPI spreads to gauge corporate profit margins.
Unlike CPI's consumer focus, PPI tracks three production stages: crude goods (e.g., iron ore), intermediate goods (steel coils), and finished goods (cars). The Fed monitors PPI for supply chain pressures—U.S. PPI spiked 11.7% YoY in March 2022 amid COVID disruptions. Manufacturers often pass PPI increases to consumers with a 3-6 month lag. The ECB's equivalent is the Industrial Producer Price Index (IPPI). Investors watch PPI-CPI spreads to gauge corporate profit margins.