Producer price index (PPI)
Producer price index (PPI)
It is just like the previous index but demonstrates the level of the prices for the basket of manufactured goods. Before 1978 this indicator was called the "Wholesale price index". It consists of two parts: entering price (raw materials, components, etc.) and output price (cost of the ready product).
Naturally, the output price includes the labor costs used to produce the goods so this index can predict inflation connected with the growth of labor costs ie wages..
Like CPI the readings from this index is more reliable if you exclude food and energy costs. The other difference is that imported goods prices are excluded from this index (as they deal with the industry basket of goods of another country).
This index is a noticeable one for its influence on the market.
In cases where the growth of interest rates is expected - the rise of this index usually leads to the rise of the US dollar quotation (only the dollar or in the example of the US?).
It is released monthly, the next week after the Non-farm payrolls data is published, at 08:30 EST (New York).
