Consumer Prices

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Industrial Production and Capacity Utilization

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Producer Prices

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ISM Index
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The producer price index (PPI) is released mid-month following the reference month and is the first broad inflation report to hit the market. It is based on a survey of 3,200 commodities sampled on the Tuesday of the week that includes the 13th of the month. The PPI does not include the prices of services, but it does include the cost of capital equipment. Producer prices are broken down by the stage of the production process: crude (raw materials), intermediate (semi-processed) and finished goods.

The PPI comes out a few days before the consumer price index, and as consumer goods—excluding food and energy—account for roughly 40% of the PPI, with consumer foods accounting for another 23%, the PPI can be useful to refine CPI forecasts.

The prices of finished goods receive the most attention, although crude and intermediate prices are very useful for determining if inflation is developing at the earlier stages of the production process.

Core producer prices, excluding food and energy, are more stable and predictable than overall PPI and are a better indicator of producer inflation. A steady increase in core PPI inflation would heighten concerns that higher prices may pass through to consumers.