Producer price index

Formerly known as the wholesale price index between 1902 and 1978, the index is made up of over 16,000 establishments providing approximately 64,000 price quotations that the U.S. Bureau of Labor Statistics (BLS) compiles each month to represent thousands of different goods and services.

[3] When manufacturers face increased production costs (input costs), businesses must reconsider their pricing approach by either: The PPI system encompasses the production of all industries in the sectors involved in manufacturing goods:[5] Imports are excluded, but locally produced goods that are transported between businesses owned by the same corporation are included.

[6] The PPI is determined by taking the average weighted price of goods and services produced in the U.S. for the current month and year, dividing it by the average weighted prices of goods and services produced in the U.S. during a base month and year, and then multiplying the outcome by 100.

[9] The origins of the index can be found in an 1891 U.S. Senate resolution authorizing the Senate Committee on Finance to investigate the effects of the tariff laws "upon the imports and exports, the growth, development, production, and prices of agricultural and manufactured articles at home and abroad".

[10] The Indian wholesale price index (WPI) was first published in 1902, and the country now uses CPI.