Producer Price Index (PPI)

The Producer Price Index (PPI) is an economic indicator that measures the change in the price of goods and services sold by producers. It is used to gauge inflation and business trends.

For example, if the PPI for a certain item increases from year to year, it indicates that the item is becoming more expensive for producers to produce.

The formula for calculating PPI is: PPI = (Cost of current period/Cost of base period) x 100.

PPI can be used to measure inflation, as an increase in the PPI is often associated with an increase in the cost of living. It can also be used to measure business trends, as it can indicate whether or not a business is able to keep up with the rising costs of production.