How is Producer Price Index calculated?

The producer price index has a fixed set of weights; it tracks changes in prices at which national producers sell their goods at the wholesale level. Producer Price Index covers all stages of production: finished products, intermediate stages, raw materials; and all sectors - agriculture, mining, industry.

The PPI does not include the prices of imported goods, but they affect the index through the prices of imported components and raw materials. This is the main difference between the producer price index and the consumer price index: PPI covers only goods at the level of their wholesale.

On a monthly basis, the US Bureau of Employment Records analyzes approximately 3,500 products in the PPI calculation and includes them in the index depending on their contribution to the country's GDP. The proportions according to which goods are included in the PPI index are as follows:

• consumer goods, cars - 40%;
• food products - 23%;
• energy products, including gasoline and other fuels - 14%.