- 1. Producer Price Index MTH121
2. Producer Price Index (PPI)
- The Producer Price Index (PPI) program measures the average
change over time in the selling prices received by domestic
producers for their output.
- The prices included in the PPI are from the first commercial
transaction for many products and some services.
3. PPI Publication Structures
- Main publication structures
- stage-of-processing-based
- Other publication structures
- Producer price indexes by durability of product
- Special commodity groupings
- Fabricated metal products
- Selected textile mill products
4. * Main PPI Publication Structures
- The PPI publishes over 600 industry price indexes in
combination with over 5,000 specific product line and product
category sub-indexes.
5. * Main PPI Publication Structures
- The PPI publishes over 2,000 commodity price indexes organized
by type of product and end use.
6. Main PPI Publication Structures
- Stage-of-processing based
- The PPI publishes aggregate price indexes organized by
commodity-based processing stage.
- The three stages of processing include Finished Goods;
Intermediate Materials, Supplies, and Components; and Crude
Materials for Further Processing.
7. Consumer Price Index (CPI)
- The Consumer Price Indexes (CPI) program produces monthly data
on changes in the prices paid by urban consumers for a
representative basket of goods and services.
8. Differences between PPI and CPI
- Differences in primary use
- Differences in composition
- Differences in timing of prices collected
9. * Differences in Primary Use
- A primary use of thePPIis to deflate revenue streams in order
to measure real growth in output.
- A primary use of theCPIis to adjust income and expenditure
streams for changes in the cost of living.
10. * Differences inComposition
- The average change in prices over time of domestically produced
and consumed commodities.
- The index is comprised of prices for both consumer goods and
capital equipment, but excludes prices for services.
- Weights for the finished goods are currently based on the value
of shipments of products
- The average change in prices over time of goods and services
purchased for personal consumption by urban U.S. households.
- The index is comprised solely of prices for consumer goods,
thus it excludes prices for capital equipment.
- CPI weights correspond to the Consumer Expenditure Survey
11. * Differences in the Type
- The price collected for an item included in the PPI is the
revenue received by its producer.
- Sales and excise taxes are not included in the producer price
because they do not represent revenue to the producer.
- The price collected for an item included in the CPI is the
out-of-pocket expenditure by a consumer for the item.
- Sales and excise taxes are included in the price because they
are necessary expenditures by the consumer for the item.
12. * Differences in Timing of Collection
- The PPI uses primarily a mail survey, which is sent to
respondents on a monthly basis.
- Once revised, PPI indexes are considered final.
- A new model is priced when the producer stops selling the
previous model.
- The CPI collects price quotes by telephone or personal visits
by BLS representatives.
- CPI does not routinely revise indexes.
- Most items in the CPI are priced at the outlet until they are
no longer available for sale
13. Producer Price Index: All Commodities (PPIACO) 14. PRODUCER
PRICE INDEXES MARCH 2010 15. PRODUCER PRICE INDEXES MARCH 2010
- The Producer Price Index for Finished Goods rose 0.7 percent in
March, seasonally adjusted, the U.S. Bureau of Labor Statistics
reported today. This advance followed a 0.6-percent decline in
February and a 1.4-percent increase in January. At the earlier
stages of processing, prices received by manufacturers of
intermediate goods climbed 0.6 percent in March and the crude goods
index rose 3.2 percent. On an unadjusted basis, prices for finished
goods advanced 6.0 percent for the 12 months ended March 2010,
their largest year-over-year gain since an 8.8-percent rise in
September 2008. (See table A.)
16. Coverage of PPI
- The Producer Price Index is expected to rise for the fourth
straight month to 0.8 percent in October from a 0.4 percent
increase in September.
- Industrial production index is expected to show that activity
improved to 0.30 percent in October, after falling for the first
time in a year to 0.2 percent in September.
17. Coverage of PPI
- The PPI tracks price change for practically the entire output
of domestic goods-producing sectors: agriculture, forestry,
fisheries, mining, scrap, and manufacturing.
- In recent years, the PPI has extended coverage to many of the
non-goods producing sectors of the economy, including
transportation, retail trade, insurance, real estate, health,
legal, and professional services.
- The PPI continues to increase coverage of several other
non-goods producing sectors of the economy. New PPIs are gradually
being introduced for the products of industries in the utilities,
finance, business services, and construction sectors of the
economy.
18. US Producer Price Index Product Past Present and Future Past
Trend Present Value & Future Projection Price Index All
Commodities. 1982 = 100. Not Seasonally Adjusted. 19. U.S. Producer
Price Index PPI Forecast Price Index All Commodities. 1982 = 100.
Not Seasonally Adjusted Month Date Forecast Value 50%Correct +/-80%
Correct +/- 0 Sep 2010 185.10 0.0 0.0 1 Oct 2010 185.7 1.2 2.7 2
Nov 2010 186.3 1.5 3.4 3 Dec 2010 187.1 1.7 3.9 4 Jan 2011 187.9
1.9 4.2 5 Feb 2011 188.6 2.0 4.6 6 Mar 2011 189.1 2.2 4.9 7 Apr
2011 189.4 2.3 5.1 8 May 2011 189.0 2.4 5.3 20. Web Project on Page
182 NO.46
- http://www.bls.gov/ppi/ppiover.htm
- http://en.wikipedia.org/wiki/Producer_price_index
- http://www.forecasts.org/ppi.htm
- http://research.stlouisfed.org/fred2/series/PPIACO
- http://www.investopedia.com/university/releases/ppi.asp
- http://www.bls.gov/ppi/ppicpippi.htm
- http://www.bls.gov/dolfaq/bls_ques16.htm
- http://www.businessinsider.com/ppi-march-rise-2010-4
21. Thank you!