What is "producer price index"

n. (context economics English) A statistical estimate of the level of prices of goods and services bought by domestic producers.

n. an index of changes in wholesale prices [syn: wholesale price index]

A Producer Price Index (PPI) measures the average changes in prices received by domestic producers for their output. It is one of several price indices.

Its importance is being undermined by the steady decline in manufactured goods as a share of spending.

The Indian Wholesale Price Index (WPI) was first published in 1902, and was used by policy makers until it was replaced by the Producer Price Index (PPI) in 1978. The Wholesale Price Index (WPI) is the index used to measure the changes in the average price level of goods traded in wholesale market. A total of 676 commodity prices make up the index. It is available on a weekly basis, with the shortest possible measurement lag being two weeks. Because of this, it is widely used in business and industry circles and in Government, and is generally taken as an indicator of the inflation rate in the economy. As this is the most applicable method to measure inflation in our economy. But due to high inflation rates the government reduces some commodities.