Glossary Term

PPI (Producer Price Index)

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The producer price index is an important and highly-traded economic indicator that reveals key information about the state of consumer inflation. It monitors the changing prices of the goods and services that are sold by producers on a month by month basis. PPI is important as a leading indicator because the changes it records and reports on are picked up before they come to be felt by the wider economy. The reason for this? Producer prices are eventually passed on to the consumer, so it’s a leading indicator of consumer inflation. This report tends to generate a great deal of volatility, especially when it’s released in advance of CPI (consumer price index) data as these two reports are highly correlated with each other.

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What is PPI (producer price index)? A Traders Expert explanation

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