Producer Price Index (PPI)
Measures price changes at the wholesale/producer level — a leading indicator of consumer inflation since input costs roll into retail prices.
The Producer Price Index (PPI) tracks price changes from the seller's perspective — what manufacturers and wholesalers receive for their output. Because input costs eventually pass through to consumers, PPI is often viewed as a leading indicator for CPI.
A sharp rise in PPI can signal that consumer inflation is building in the pipeline, prompting preemptive tightening from a central bank. Conversely, falling PPI can signal disinflationary pressure before it shows up in CPI — useful for anticipating the next policy pivot.