PPI explained: producer prices and the early warning for inflation
What the Producer Price Index measures, who publishes it, when it comes out, core PPI, and how it hints at the next CPI and PCE.
Before a price reaches the shelf, it starts with businesses: what factories, farms and service companies charge for what they sell. When those prices rise, consumers often see it a few months later. That's why traders watch PPI as an early warning for inflation.
What PPI stands for
PPI means Producer Price Index. It measures the average change in the prices that U.S. producers receive for their goods and services. It's published by the Bureau of Labor Statistics (BLS), the same agency that publishes CPI and the jobs report.
When it comes out
| Published by | Bureau of Labor Statistics (BLS) |
| How often | Monthly, for the previous month |
| Time | 8:30 a.m. New York time |
| Usually | The same week as CPI, a day or two before or after |
What it measures
- Final demand: the headline. Prices for goods, services and construction sold to the end user (consumers, businesses investing, government and exports).
- Goods and services separately: energy and food make goods jumpy; services show the steadier trend.
- Core PPI: the index without food and energy, and a version without trade services too, to see the underlying trend.
PPI is what businesses get paid. CPI is what consumers pay. When PPI rises, companies either pass it on or take smaller profits.
Every market it moves
This report doesn't only move futures. Here is what usually happens across markets in the first minutes and hours, compared with what economists expected. The ticker symbols in parentheses are the futures contracts traders use for each market.
| Market | Hotter than expected | Cooler than expected |
|---|---|---|
| Stock indexes: S&P 500, Nasdaq 100, Dow, Russell 2000 (ES, NQ, YM, RTY) | Usually fall, because rates stay high for longer. The Nasdaq and small caps are often hit hardest. | Usually rise |
| Treasury bonds (ZT, ZN, ZB) | Prices fall and yields rise, the 2-year most | Prices rise and yields fall |
| U.S. dollar and currencies (DXY; EUR/USD, USD/JPY, USD/MXN; 6E, 6J) | The dollar usually rises | The dollar usually falls |
| Gold and silver (GC, SI) | Usually fall on higher yields and a stronger dollar | Usually rise |
| Crude oil (CL) | Little direct effect | Little direct effect |
| Bitcoin and crypto | Usually fall, often moving with the Nasdaq | Usually rise |
| Rate expectations (fed funds futures, ZQ) | Fewer or later rate cuts priced in | More or sooner rate cuts priced in |
These are the usual first reactions, not rules. When the market fears a slowdown more than inflation, good news can become bad news for stocks, and the other way around. Watch how prices actually react before acting on the number. The dollar, oil and gold and bonds and yields explained go deeper into how these markets connect.
Why traders care
- A hint at CPI and PCE: parts of PPI feed straight into PCE, the Fed's favorite inflation number, so economists update their PCE forecasts right after PPI. See PCE inflation explained.
- A smaller move than CPI, usually, but a big surprise can still move ES, NQ, bonds and gold at 8:30 a.m.
- Context matters: a hot PPI the day after a hot CPI adds to rate worries; a soft one can calm them.
How to handle it
Mark PPI on the same weekly plan as CPI. If you trade the open, the 8:30 a.m. move happens an hour before the stock market opens, so the opening range can already reflect it. Inflation and CPI explained covers the consumer side. Market Matrix lists PPI on the Market events calendar with an alert you can set.
This article is for education only and isn't financial advice. Trading futures involves substantial risk of loss. Release dates and times come from the agencies that publish the data and can change.