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The Producer Price Index (PPI)

As mentioned above, the PPI is one of the two most important ways to measure inflation (along with the CPI). The PPI is released at 8:30 am EST during the second full week of each month and reflects the previous month's data. The index measures the price of goods at the wholesale level. So, while the CPI tracks the cost paid by consumers for goods, the PPI tracks how much the producers are receiving for the goods. There are three types of goods measured by the PPI: crude, intermediate, and finished. Crude goods are raw materials used in production of something else, intermediate goods are components of a larger product, and finished goods are what is actually sold to a reseller. The finished goods data are the most closely watched because they are the best measure of what consumers will actually have to pay. The latest report can be found at the Bureau of Labor Statistics.

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