The PPI records price changes for nearly every economic sector in the United States (goods, transportation, insurance, real estate, health, legal, and professional services). The PPI is considered a measure of inflation. Consumers may wonder why the PPI increased 0.2 percent in May, when gas prices rose so much more (gasoline prices were up nearly 14 percent for the month). Energy prices are a portion of the PPI, but the index reflects the aggregated price increases or decreases. In addition, economists and others often exclude energy and food prices because they are volatile and fluctuate more often than other prices. Economists will look at the core PPI, which fell 0.1 percent for May 2009.

The Bureau of Labor Statistics provides detailed reports on the indexes of the individual sectors of the economy on their website and in print. The St. Louis Fed offers data on its FRED website, where the PPI can be graphed and downloaded many different ways. The most common way is the aggregate PPIFGS, which is represented as an index number of 170.2, using a base year of 1982. This can be described as “Prices received by domestic producers of a systematic sample of finished goods have risen from $100 in 1982 to $170.2 today.” 1

The PPI is usually reported in the news as a percent change from the previous month. This link to the FRED graph shows that percent change from April 2009.Core producer prices, which exclude food and energy costs, fell 0.1 percent, indicating broad pressure on prices because of lower demand across the economy.

Source: Federal Reserve Bank of St. Louis