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Title: Producer Price Index:
PPI
Originator:
Department/Agency Name:
Department Of Labor
Major Organizational
Subdivision: Bureau of Labor Statistics
Minor Organizational
Subdivision: Office of Prices and Living Conditions
Name of Unit: Division
of Industrial Prices and Price Indexes
Access Constraints:
None. Approved for Public Release
Use Constraints: None
Abstract: The Producer Price Index is a family of indexes that
measures the average change over time in the selling prices received by
domestic producers of goods and services. PPI's measure price change from the
perspective of the seller. This contrasts with other measures, such as the
Consumer Price Index (CPI), that measure price change from the purchaser's
perspective. Sellers' and purchasers' prices may differ due to government
subsidies, sales and excise taxes, and distribution costs. Over 10,000 PPI's
for individual products and groups of products are released each month. PPI's
are available for the products of virtually every industry in the mining and
manufacturing sectors of the U.S. economy. New PPI's are gradually being
introduced for the products of industries in the transportation, utilities,
trade, finance, and services sectors of the economy.
Purpose:
Producer Price Index data are widely used by the business community as well as
government. Three major uses are: As an economic indicator. The PPI's capture
price movements prior to the retail level. Therefore, they may foreshadow
subsequent price changes for businesses and consumers. The President, Congress,
and the Federal Reserve employ these data in formulating fiscal and monetary
policies. As a deflator of other economic series. PPI's are used to adjust
other economic time series for price changes and to translate those series into
inflation-free dollars. For example, constant-dollar gross domestic product
data are estimated using deflators based on PPI data. As the basis for contract
escalation. PPI data are commonly used in escalating purchase and sales
contracts. These contracts typically specify dollar amounts to be paid at some
point in the future. It is often desirable to include an escalation clause that
accounts for increases in input prices. For example, a long-term contract for
bread may be escalated for changes in wheat prices by applying the percent
change in the PPI for wheat to the contracted price for bread. (See BLS Report
807, Escalation and Producer Price Indexes: A Guide for Contracting Parties.)
Agency Program: 29 U.S.C. 1, 2; 19 U.S.C. 2393 Statutory
Requirement Met by the Program: The Bureau of Labor Statistics shall acquire
and diffuse among the people of the United States useful information on
subjects connected with labor, in the most general and comprehensive sense of
the word, and the means of promoting their prosperity (29 U.S.C. 1). The
Secretary of Labor and the Secretary of Commerce are authorized to "establish
and maintain a program to monitor imports ... which will reflect changes in the
volume of such imports, the relation of such imports to changes in domestic
production, changes in employment within domestic industries producing articles
like or directly competitive with such imports, and the extent to which such
changes in production and employment are concentrated in specific geographic
regions of the United States" (Trade Act of 1974, 19 U.S.C. 2393).
Local Subject Terms:
- Wholesale Prices
- Inflation
- WPI
- Stage of Processing
- US Federal GILS
Availability:
Distributor:
Name:
Office of Publications
Organization:
Bureau of Labor Statistics
Street
Address: 2 Massachusetts Avenue, NE Room 2860
City:
Washington
State:
DC
Zip
Code: 20212
Country:
USA
Network
Address: blsdata_staff@bls.gov
Hours
of Service: 8:30 a.m. – 4:30 p.m. ET
Telephone:
(202) 691-5200
Fax:
(202) 691-7890
Order Process: website
Linkage:
http://stats.bls.gov
Linkage Type: text/html
Point of Contact:
Name: Office of
Publications
Organization: Bureau of
Labor Statistics
Street
Address: 2 Massachusetts Avenue, NE Room 2860
City: Washington
State: DC
Zip Code: 20212
Country: USA
Network Address:
blsdata_staff@bls.gov
Hours of Service: 8:30
a.m. – 4:30 p.m. ET
Telephone: (202)
691-5200
Fax:
(202) 691-7890
Sources of Data:
Department/Agency Name:
Department Of Labor
Major Organizational
Subdivision: Bureau of Labor Statistics
Minor Organizational
Subdivision: Office of Prices and Living Conditions
Name of Unit: Division
of Industrial Prices and Price Indexes
Record Source:
Name: Office of
Publications
Organization: Bureau of
Labor Statistics
Street
Address: 2 Massachusetts Avenue, NE Room 2860
City: Washington
State: DC
Zip Code: 20212
Country: USA
Network Address:
blsdata_staff@bls.gov
Hours of Service: 8:30
a.m. – 4:30 p.m. ET
Telephone: (202)
691-5200
Fax:
(202) 691-7890
Date of Last Modification: 20000907
Control Identifier: DOL-BLS-000159
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