US producer price index (PPI)
Prices businesses get for what they sell.
The basics
The PPI measures the prices producers receive. Rising costs for businesses can be passed on to shoppers later, so PPI is watched as an early sign of consumer inflation.
How to read the result
- Above the forecast
- Producer prices above the forecast can point to higher inflation ahead and often lift the US dollar.
- Below the forecast
- Producer prices below the forecast often weaken the US dollar.
Going deeper
Some PPI components, such as airfares and medical care, feed straight into the PCE index, so economists update PCE estimates as soon as PPI is out.
FAQs
- Why can the price move the “wrong” way?
- Prices already reflect the forecast, so markets react to the surprise, not the number itself. Other parts of the same release, revisions to earlier months or other news in the same hour can outweigh the headline figure, and a first move often reverses within the hour.
- Should I close my trade before the release?
- That is your decision; this page does not give advice. What is certain is that prices can jump in seconds around big releases, spreads widen, and a stop loss can close at a worse price than the one you set. Many traders check their position size and stop before the release.