Prices charged by US businesses rose 10.8 percent year-on-year in May, marking the sixth consecutive month that the government’s producer price inflation rate was 10 percent or higher.
The producer price index for final demand rose 0.8% month-on-month in May, the Labor Department said on Thursday. This represents a momentum in monthly price increases since April.
Economists expect 11 percent annual growth and 0.8 percent monthly growth. In April, the index rose 11 percent year-on-year.
The producer price index (PPI) is sometimes incorrectly referred to as the wholesale price inflation index. Although it is sometimes called the wholesale price index, it does not focus on the wholesale price. Instead, it is built by examining what businesses that produce goods and services in the U.S. buy for goods and services, while the more specific CPI measures how much consumers pay and includes both the import and change of ownership of the so-called homestead. Rent not taken into account in PPI.
“The Wholesale Price Index (WPI) was the name of the program from its inception until 1978 when it was renamed Producer Price Index,” the Bureau of Labor Statistics says on its website. explains: “The term wholesale price index It is misleading that the index never measures price changes in the wholesale market.”
The PPI measures prices for both different stages of intermediate demand, businesses selling to other businesses, and final demand, which measures domestic producers selling products and services to local end users, often government agencies, consumers, or businesses. The widely reported PPI is the ultimate measure of demand.
PPI does not include imports and does not account for sales taxes, as it is paid to foreign manufacturers and governments. It also includes export prices that are not included in the CPI because they are paid by non-US consumers.
The target range of products and services included in the PPI are all products sold by US manufacturers. This includes goods, services and construction products purchased by other manufacturers as a contribution to their operations or as capital investments, goods and services purchased by consumers directly from a service provider or directly from a retailer, and goods sold for export and by the manufacturer. situation.
The CPI considers the range of goods and services purchased for consumption by urban households in the United States, excluding capital investment or commercial purchases as food production, government purchases, and export inputs. The CPI also excludes prices included in the PPI that are not directly paid by consumers, such as government programs or medical bills paid by insurance companies.
Source: Breitbart
