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Used as a signal for rising average prices at the consumer level, the Producer Price Index (PPI) represents a family of indexes similar to CPI. However, as opposed to focusing on the prices that consumers pay, the PPI focuses on the change in prices received by producers. Since the price received by producers is a cost to retail businesses, the PPI is also seen as a reflection of the costs that businesses incur to acquire the goods needed to offer their products. An increase in costs at the business level squeezes profit margins and puts pressure on these businesses to pass the added cost onto consumers.

For access to information on the consumer price index, be sure to check out Episode 133 titled "How to Measure the Rate of Inflation"

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