Producer Price Index-Why it matters

PPI captures the price movements at the wholesale level before price changes retail costs.

Here is a historical look at the PPI. It has grown at a rate of 6.95% annually for the past 30 years.

The PPI is not as strong as the CPI (consumer price index) or PCE Deflator (Personal Consumption Expenditure) in detecting inflation, but it is valuable because it is the first available measure of inflation in the month. Today there was a seasonally-adjusted increase in the PPI of 1.8%. This could possibly be a blip as it is only the second consecutive increase; October showed an increase of 0.3% year-over-year.