US Producer Price Index (PPI)

The US Producer Price Index (PPI) shows how much more or less American companies charge for their goods and services each month. It is also called "factory-gate inflation" because it shows price pressure before it reaches store shelves and consumers' pockets. On this page you can see the next PPI release time in Tehran time, the latest actual figure and forecast, and the history of monthly PPI and core PPI; this guide explains how to read these numbers and why a seemingly secondary data release sometimes moves the dollar and gold.

What does the US PPI measure?

PPI is published by the US Bureau of Labor Statistics (BLS), the same agency that publishes consumer inflation and employment data. The main difference is the point of view: US inflation (CPI) measures the prices households pay, while PPI measures the prices domestic producers receive. The headline figure of the report is "Final Demand", which covers goods, services and part of construction. Because services make up a large share of this basket, PPI today is not just a measure of raw materials and factories.

PPI release time in Tehran time

The PPI report is monthly and is usually released mid-month, a few days before or after CPI. It is released at 8:30 a.m. New York time, which is 16:00 Tehran time in summer and 17:00 in winter. Iran does not observe daylight saving time, so the one-hour shift is only due to the change in official US time. The countdown at the top of this page shows the exact time.

Reading the report: headline PPI, core PPI, monthly and annual

Several figures from one report are published in the economic calendar, and each has its own use:

Figure	What it shows	Note
Monthly PPI (m/m)	Change in final demand prices from the previous month	The main figure to compare with the forecast
Annual PPI (y/y)	Change from the same month a year earlier	Shows the long-term trend
Core PPI	Excluding food and energy	Less volatile and better shows the underlying trend
Excluding food, energy and trade services	A narrower BLS measure	Also strips out wholesale and retail margins

Food and energy prices can rise or fall sharply in a single month, which is why analysts often pay more attention to core PPI. The previous month's figure is also revised in each report, and sometimes the revision matters as much as the new figure itself.

How PPI relates to CPI and PCE

Higher production costs are not always fully passed on to consumers; sometimes companies absorb them out of their profit margins. So a higher PPI does not necessarily mean a higher CPI the following month, but it does show the direction of price pressure. Another reason PPI matters is that some of its components, such as healthcare services and airfares, are used in calculating the PCE price index , the index the Federal Reserve tracks for its inflation target. That is why analysts update their PCE estimates after CPI and PPI are released, and market expectations for the Federal Reserve interest rate decision can change as well.

How markets react to PPI

Market reaction to PPI is usually milder than to CPI, but when the market is sensitive to inflation, a big surprise can trigger a serious move. Common patterns, which do not always hold, are:

• PPI above forecast: higher interest rates are seen as more likely; the dollar usually strengthens and gold (per ounce) comes under pressure.
• PPI below forecast: a sign of easing inflation pressure, usually read as positive for gold and indices such as the Nasdaq 100 and the crypto market.
• Release order: if PPI comes out before CPI, the market treats it as a clue to CPI and gives it more weight; if it comes out after CPI, its impact is often smaller.

To understand the general mechanism behind this effect, read the article The Impact of Inflation on Financial Markets .

Trading tips for PPI release day

1. Before the release, check the forecast for both headline and core PPI; the market reacts to the gap between the actual figure and the forecast, not to the figure itself.
2. If both figures surprise in the same direction, the move is usually clearer; if they diverge, the market may become confused and move both ways.
3. In the first few minutes, brokers' spreads widen; a very tight stop loss is vulnerable at this moment.
4. Use the trader's calculator to size your position so that a sharp one-sided move does not exceed your risk limit.

This page is for information only and is not a recommendation to buy or sell.