Upcoming Producer Price Index methodology changes

When BLS releases the January 2014 Producer Price Index (PPI) on February 19, we will begin using new methods of calculating the estimates. This shift will result in significant changes to the PPI news release and other data and documents available from the PPI program. The PPI will transition from the Stage of Processing (SOP) to the Final Demand-Intermediate Demand (FD-ID) aggregation system. The transition to the new system is the result of a longstanding objective to improve the measures by incorporating indexes for services, construction, government purchases, and exports. In comparison to the SOP system, the FD-ID system more than doubles current PPI coverage of the U.S. economy to over 75 percent of in-scope domestic production. The FD-ID system was introduced as a set of experimental indexes in January 2011. Nearly all new FD-ID goods, services, and construction indexes provide historical data back to either November 2009 or April 2010, while the indexes for goods that correspond with the historical SOP indexes go back to the 1970s or earlier.

These are exciting and important improvements to the measurement of price changes in our economy. Here are links to two articles published this week in the Monthly Labor Review that discuss the new PPI in depth:

I am also pleased to note that Jean Fox, a research psychologist in the BLS Office of Survey Methods Research, was recognized recently by the online publication FierceGovernment for her innovative work on conducting superior surveys that measure user experience. Jean co-chairs the government’s User Experience Community and has been a long-time advocate for user experience—the behaviors and attitudes about using a particular product. You can read more about Jean’s great work at BLS and her mentorship of people in other federal agencies.