Producer Price Index Flashcards
Market sensitivity?
What is it?
Very high
Measures the change in prices paid by businesses.
Release time?
Frequency?
8:30 am (ET), two to three weeks after the reporting month ends
monthly
Source?
Bureau of Labor Statistics, Department of Labor
What does it measure?
The PPI measures changes in prices that manufacturers and wholesalers pay for goods during various stages of production.
Three indices within the PPI?
Crude goods
intermediate goods
finished goods
What do the three price indices within the PPI index represent?
the three progressive stages of production
Crude goods index represents what?
the cost of raw materials entering the market for the first time.
Intermediate goods index represents what?
the cost of commodities that have undergone transitional processing before becoming the final product.
Finished goods index represents what?
cost of final goods to be purchased by retailers
“Consumer products” account for what proportion of the PPI for finished goods?
75%
What is the difference between the PPI index and the core PPI index?
Core PPI excludes the categories of food and energy.
What proportion of the finished goods PPI do the categories of food and energy account for?
40%
How is the PPI measured?
By whom?
Every month, around the week that includes the 13th, the Labor Department receives answers to questionnaires requesting prices on about 100,000 different items from nearly 30,000 firms around the country.
How is the weighting of commodities determined?
How often is this methodology reviewed and modified?
Based on how much revenue these goods generate in the economy.
Every five years or so.
What categories are intentionally left out of the PPI basket?
imported goods and most services.
Excise taxes
