Producer Price Index (PPI)

The Producer Price Index (PPI) measures price changes at the wholesale or producer level — what businesses pay for inputs before those costs get passed to consumers. Released monthly by the Bureau of Labor Statistics at 8:30 AM ET, typically the day before CPI, PPI has earned its reputation as a leading indicator for consumer inflation.

Traders watch three PPI cuts: the headline (all commodities), core (ex food and energy), and core ex food, energy, and trade services — the so-called "super core" PPI that feeds most directly into PCE calculations, the Fed's actual inflation target. When the super core PPI runs hot, analysts immediately revise their PCE forecast for the month ahead, which in turn shifts rate expectations.

PPI's market impact is typically smaller than CPI but is not trivial. A hot PPI print the day before a CPI release puts traders on edge and often leads to defensive positioning in equities into the next morning. Energy price changes embedded in headline PPI can be misleading; strip those out and focus on services PPI, which reflects the stickier, harder-to-reduce inflation the Fed cares most about in 2025–2026.

For active traders, PPI is best used as a context-setter rather than a standalone trading catalyst. Use it to sharpen your CPI and PCE expectations rather than to trade the 8:30 AM candle directly.