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Handbook of Methods Producer Price Indexes Overview

Producer Price Indexes: Overview

The Producer Price Index (PPI) measures average changes in prices received by domestic producers for their output. Most of the information used in calculating producer price indexes is obtained through the systematic sampling of industries. In the mining and manufacturing sectors, price information from virtually every industry is captured. By contrast, although PPI coverage of the service sector of the economy is substantial at roughly 70 percent of total sector revenue, it is incomplete. The PPI program also includes data that track other sectors of the economy: agriculture, fishing, forestry, utilities (natural gas and electricity), and construction.

As of January 2024, the PPI program included the following indexes:

• Price indexes for approximately 500 mining, forestry, utility, construction, manufacturing, and services industries; indexes for over 500 groupings of industries; and nearly 3,700 indexes for specific within-industry product and service categories.
• More than 3,700 commodity price indexes for goods and about 900 for services (seasonally adjusted and not seasonally adjusted), organized by product, service, and end use.
• Over 600 indexes for aggregate measures of price change, including the aggregation system for final demand–intermediate demand (FD–ID).

Together, these elements constitute a system of price measures designed to meet the need for both aggregate information and detailed applications, such as following price trends for specific industries and products, as well as the need for tracking price movements at a more aggregated level relative to the overall economy.