The producer price index (PPl) is an index to measure the trend and degree of the ex-factory price changes of industrial enterprises, an important economic index to reflect the price changes in the production field in a certain period, and an important basis for formulating relevant economic policies and national economic accounting.

The producer price index is different from CPI, and its main purpose is to measure the total cost of a basket of goods and services purchased by enterprises. Because enterprises will eventually transfer their expenses to consumers in the form of higher consumer prices, it is generally believed that the change of producer price index is useful to predict the change of consumer price index.

The purpose of producer price index:

Producer price index (PPI) is used to measure the price of goods that producers need to buy in the production process, so this index contains the price information of raw materials, semi-finished products and final products (about 3000 things are used in the United States), and it is the predecessor of consumer price index (CPl: measuring the price of goods and services from the standpoint of consumers).

Excluding food and energy, it is called the "core PPI" index to correctly judge the real trend of prices-this is because the prices of food and energy have always been affected by seasons and the relationship between supply and demand, and fluctuated violently. Theoretically, the price fluctuation in the production process will be reflected in the price of the final product, so observing the change of PPI is helpful to predict the future price change, so this indicator is valued by the market.