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Producer Price Index PPI

Economy Term

The Producer Price Index (PPI) is a family of indexes that measure the average change over time in the prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI). CPIs measure price change from the purchaser's perspective. Sellers' and purchasers' prices can differ due to government subsidies, sales and excise taxes, and distribution costs.

Within the stage-of-processing system, finished goods are commodities that will not undergo further processing and are ready for sale to the final-demand user, either an individual consumer or business firm. Consumer foods include unprocessed foods such as eggs and fresh vegetables, as well as processed foods such as bakery products and meats. Other finished consumer goods include durable goods such as automobiles, household furniture, and appliances, as well as nondurable goods such as apparel and home heating oil. Capital equipment includes durable goods such as heavy motor trucks, tractors, and machine tools.

The stage-of-processing category for intermediate materials, supplies, and components consists partly of commodities that have been processed but require further processing. Examples of such semifinished goods include flour, cotton yarn, steel mill products, and lumber. The intermediate goods category also encompasses nondurable, physically complete items purchased by business firms as inputs for their operations. Examples include diesel fuel, belts and belting, paper boxes, and fertilizers.



   
     
Related Economy Terms
                     
                     
 Advance monthly sales   CE-marked   Durable Goods  
 Affiliate   CFTC Commodity Futures Trading Commission   E-Commerce  
 Agents and Brokers   Civilian labor force   Employer Identification Number  
 ARPU   Constant Currency   Employment population ratio  
 Balance of payments   Consumer Price Index CPI   EU - European Union  
 Balance on current account   Corporate Integrity Agreement   Euro Zone  
 Balance on goods and services   Deflation   European Monetary Union  
 Bonded Warehouses Manufacturing   Direct investment   Executive Management  
 Brokers   Dividends   Exports of goods and services  
 Business sector   Drop Ship Retail   Factory Inventories  
               
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