Producers tend to pass on higher costs to consumers as higher retail prices, thus the PPI is valuable as an early indicator of inflation. Simply put, inflation reflects a decline in the purchasing power of a country's currency, where each dollar buys fewer goods and services. The report also gives insight into how higher prices from raw materials flow through intermediaries toward the final product.

Differences in PPI
Because each country may specialize in producing different goods and services, the PPI does vary from country to country. Each country may also choose to benchmark their prices to different years, reflective of differing monetary policy for each country's central bank. Thus economist and traders need note that 2.0% PPI for one country does not perfectly translate to another. T raders need to pay attention to developing trends in inflationary figures -specific to the country- to help forecast future rates.

Core PPI
Because excessive volatility may exist for certain components of PPI, countries tend to release Core PPI figures, which control for the most volatile goods and services. Components excluded from Core PPI usually consist of fresh food and energy, but will vary from country to country. Also many countries also release seasonally-adjusted PPI, as prices can fluctuate with seasonal regularity.

Producer Price Index (PPI) - United States | Producer Price Index (Input) - UK
Producer Price Index (Output) - UK | Producer Price Index (PPI) - Australia
Producer Price Index (PPI) - Euro-Zone | Producer Prices - France | Producer Prices - Germany