Producer Price Index (PPI): final demand, pipeline prices and CPI

The Producer Price Index (PPI) measures the average change in the selling prices that US producers receive for their goods and services. Where the Consumer Price Index looks at prices from the buyer’s side of the counter, the PPI looks from the seller’s side, and much of what it prices is sold to other businesses rather than to households. That is why it is sometimes called a measure of "pipeline" inflation: cost pressures that show up in producer prices may later reach the shelf.

The headline number is the PPI for final demand, published monthly by the Bureau of Labor Statistics (BLS) the day after or a few days after the CPI. In September 2026 it rose 1.3% in the month and 6.3% over the year, well above the 3.7% rise in consumer prices reported the day before.

This page explains what the PPI covers, how the final demand index is organized, how it differs from the CPI, and what fifteen years of data say about the claim that producer prices lead consumer prices.

What the PPI measures

BLS describes the PPI as a family of indexes measuring "the average change over time in selling prices received by domestic producers of goods and services". A few features follow from that definition:

• Seller’s prices, not buyer’s. The CPI records what consumers pay, including sales taxes; the PPI records what producers receive. Taxes, subsidies and distribution costs sit between the two, so the same product can show different price changes.
• Domestic production only. Imported goods are not in the PPI indexes. The CPI, by contrast, prices what consumers buy wherever it was made.
• Broad, not complete, coverage. The PPI covers goods-producing industries and about 69% of service-sector output, measured by 2017 Economic Census revenue. BLS says the FD-ID system more than doubled the PPI’s coverage, to over 75% of in-scope domestic production.
• Many indexes. Each month BLS releases about 10,000 indexes for individual products and groups and over 600 FD-ID indexes, built from roughly 64,000 price quotations from more than 16,000 establishments. Participation is voluntary.

How the final demand index is organized

Before 2014 the main PPI aggregates followed stages of processing, and the best-known figure was finished goods. With the release of January 2014 data, BLS made the Final Demand–Intermediate Demand (FD-ID) system the primary model. It regroups commodities by who buys them and how processed they are, and it adds services, construction, exports and government purchases that the old system left out.

• Final demand covers goods, services and construction sold for personal consumption, capital investment, government purchases and export. It is the PPI’s headline.
• Intermediate demand covers goods and services sold to businesses as inputs, arranged in stages by how far they are from final use. These indexes are the earlier links of the pipeline.

BLS also publishes final demand less foods, energy and trade services, the PPI’s rough equivalent of a core measure. Trade services are the services of wholesalers and retailers, which can swing as their markups widen or narrow.

PPI against CPI since 2011

The chart shows the two series tracking each other loosely, with the PPI line swinging further in both directions. Some readings, as 12-month changes computed from the seasonally adjusted indexes:

(BLS’s published, unadjusted 12-month figure for September 2026 is 6.3%.)

What the data show:

• Bigger swings. Over 2010–2026, PPI final demand inflation had a standard deviation of 2.7 points, against 1.9 for CPI inflation. Producer prices include more commodities and energy-intensive goods, which are volatile.
• Earlier turns in 2022, not always. PPI inflation peaked in March 2022 at 11.6%; CPI inflation peaked in June 2022 at 9.0%. On the way down, PPI inflation was close to zero by June 2023 while CPI inflation was still 3.1%. In 2015 and in April 2020, PPI fell below zero while the CPI stayed slightly positive.
• 2026. PPI inflation ran above CPI inflation in every month of 2026 through September, rising from 3.0% in January to 6.4% in September on the adjusted series, while the CPI rose from 2.4% to 3.7%.

A worked example from the September 2026 report

The PPI final demand index stood at 159.78 in September 2026 (November 2009 = 100), against 150.245 a year earlier:

BLS’s release breaks the 1.3% monthly rise down further: final demand goods rose 2.6% and final demand services 0.8%. Final demand less foods, energy and trade services was up 5.0% over twelve months. The comparison with the CPI released the day before is striking: the CPI was up 3.7% over the year, so producer prices were rising about 2.6 points faster than consumer prices.

What that gap means is the real question, and the PPI alone cannot answer it. A gap like this can close in several ways: producers pass costs on and consumer inflation rises, or margins get squeezed somewhere along the chain, or producer prices fall back. The 2022 and 2023 episodes in the chart show the gap closing from both directions at different times.

How to read the PPI

• Start with final demand, then look down the pipeline. Final demand is the headline. The intermediate demand stages show whether pressure is building earlier in the chain.
• Separate energy and food. As with the CPI, a large part of PPI volatility is energy and food. The "less foods, energy and trade services" index gives a steadier read.
• Watch services. Services are a large part of final demand, and some service prices, such as portfolio management fees, move with asset prices rather than with costs.
• Treat a single month with caution. A 1.3% monthly change annualizes to about 17%, a number that rarely persists.
• Expect revisions. BLS marks recent PPI figures as preliminary, flagged "(p)", and revises them later.

Pitfalls and limitations

• Not a cost of living measure. The PPI prices what producers sell, much of it to other producers. It says nothing direct about household budgets.
• No imports. A business that buys imported inputs faces costs the PPI does not capture.
• The lead is unreliable. Producer and consumer prices share many drivers, so the PPI often moves first only because it reacts faster to the same commodity moves. It is a hint, not a forecast.
• Breaks in history. Final demand data begin in November 2009 (that is the index base), so long comparisons rely on the older stage-of-processing series, which measured something narrower.

PPI and its neighbours

See The CPI report: how BLS builds it and how to read it for how the CPI is built and PCE inflation: the Fed’s preferred gauge vs the CPI for the Fed’s gauge.

How Finabase does it

Finabase does not carry PPI or other macro data, and it has no economic calendar. The chart on this page is ours, built from BLS data downloaded via FRED on October 30, 2026.

The app does show the market prices of many raw inputs that feed producer prices. The futures page lists energy, metals and agricultural contracts, including WTI crude oil, copper, natural gas, wheat and corn. The sector page shows how materials, industrials and energy stocks are performing, and the economy topic of Discover collects news on each release.

Frequently asked questions

What is the difference between PPI and CPI?

The PPI measures prices received by US producers, including sales to other businesses, exports and government. The CPI measures prices paid by urban consumers, including imported goods and sales taxes. The PPI swings more and excludes imports.

Does the PPI predict CPI inflation?

Sometimes. In 2022 PPI inflation peaked three months before CPI inflation, but the two share many drivers, and the PPI’s lead is not stable enough to forecast with on its own.

What is PPI final demand?

It is the headline PPI: prices for goods, services and construction sold for consumption, investment, government purchases and export. It replaced finished goods as the main PPI aggregate with January 2014 data.

When is the PPI released?

Monthly, at 8:30 a.m. Eastern time. The September 2026 PPI came out on October 15, 2026, and BLS scheduled the October 2026 report for November 13, 2026.

Summary

The Producer Price Index tracks the prices US producers receive, from raw inputs through to final goods and services, excluding imports. Its headline, PPI final demand, has been the main measure since 2014 and covers goods, services, construction, exports and government purchases. PPI inflation is more volatile than CPI inflation, and in 2022 it turned three months earlier. In September 2026 it ran at 6.3% over the year, about 2.6 points above the CPI. That kind of gap signals cost pressure in the pipeline, but whether it reaches consumers or is absorbed in margins is something only later data can show.