Producer price index

An index of prices charged between businesses

In detail

It gathers the prices of raw materials, parts and other goods traded between companies. Sitting upstream of consumer prices, it registers moves in oil and metals sooner. Whether a rise here passes through to retail prices later is one of the clues used to read where inflation is heading.

Example

Producer prices up 8% year on year may be followed six months later by consumer prices up 3%.

Related terms

Consumer Price Index (CPI) Inflation Central bank

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