What Is The Producer Price Index And How Does It Impact Stocks?

Key Takeaways

• The Producer Price Index measures the cost of goods from the producers’ perspective.
• Higher PPI numbers signify higher inflation, which could lead to interest rate hikes.
• The stock market usually reacts negatively to high PPI reports, but this can change based on all other current economic data.

The Producer Price Index is a key economic indicator that measures changes in prices across different sectors and can help represent shifting trends in particular industries from the producer’s perspective. Here is what the Producer Price Index is, how it is calculated, and how it can positively or negatively impact the stock market.