U.S News Indicators: PPI - Producer Price Index
This indicator determines the changes in the costs regarding a producer, in fact it is an indication of inflation in initial manufacturing factors.
Manufacturers seek to reduce their costs to increase the power of winning in a competition and could make more benefit out of it.
As manufacturers increase the price of their products and services, if the index fuels up, it would lead to an increase in CPI index, weakening the consumer and having the dollar’s buying power down.
That’s why similar to CPI this index has an inverse relevance to the dollar as well.
Of course, note that very low level or negative figure for the index is an indication of deflation and this is the case to have the value of the dollar down as well.
The market’s concentration on the index usually excludes food and energy costs.
That is why most of the countries have to buy the energy from overseas and global energy price changes has much effects on CPI and PPI indices.
In order to get a clearer and true view of inflation and inflationary forces of productive economies and service economies, these two factors will be removed and there will be a “Core” before the index such as Core CPI or Core PPI.
Release Time: ninth to twelfth of the month prior to CPI release at 08:30 (EST)
Relevance: Directly related with the Currency, Stocks and Commodity markets, inversely related with the bond market