PPI MoM
What is PPI MoM?
The Producer Price Index (PPI) measures the average change in prices received by domestic producers for their output — essentially inflation from the seller's perspective. It covers manufacturing, mining, agriculture, and services. Core PPI excludes food, energy, and trade services. PPI is released monthly by the Bureau of Labor Statistics, typically 1–2 weeks before CPI.
Why does it matter for investors?
PPI is a leading indicator of consumer inflation. Rising producer costs are often passed downstream to consumers, showing up in CPI weeks later. Services PPI — especially healthcare and portfolio management fees — feeds directly into Core PCE, the Fed's preferred inflation gauge. Investors watch PPI for early signals on future CPI and PCE trends.
What to watch for
- ›Month-over-month Core PPI vs. consensus estimate
- ›Healthcare services and portfolio management components (feed into PCE)
- ›Trade services PPI — a measure of wholesale margins
- ›Trend: is PPI running above or below CPI? (convergence = potential CPI relief)
- ›Food and energy PPI for commodity inflation signals
What is the difference between PPI and CPI?
PPI measures prices at the producer/wholesale level before goods reach consumers, while CPI measures prices consumers actually pay. PPI is generally considered a leading indicator of future CPI changes.
Why does PPI matter for the Fed?
Certain PPI components — especially healthcare services and portfolio management — are used directly in calculating PCE, the Fed's preferred inflation measure. Rising services PPI can signal future PCE pressure.
Market Reaction
QQQ & SPY price change ±5 trading days around this event
Source: Yahoo Finance