Producer Price Index (PPI)

Monthly values

Producer Price Index (PPI) — the last 12 months

Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.

Month	Value	Band
Aug 2026	9.8% YoY	Severe/critical reading
Jul 2026	8.7% YoY	Severe/critical reading
Jun 2026	9.8% YoY	Severe/critical reading
May 2026	12.2% YoY	Severe/critical reading
Apr 2026	9.4% YoY	Severe/critical reading
Mar 2026	6.8% YoY	Severe/critical reading

Month-end readings of the same series the chart shows, from ppi_yoy_12m. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.

What is the PPI?

The Producer Price Index (PPI) measures the average change in prices received by domestic producers for their output — essentially the inflation that businesses experience when buying goods and materials. Because businesses eventually pass rising costs on to consumers, PPI typically leads CPI (consumer inflation) by 2-3 months, making it a valuable early warning indicator for future consumer price trends.

When PPI rises faster than CPI, businesses are absorbing costs that will eventually be passed on to consumers — CPI should rise in coming months. When PPI falls sharply, it often signals that consumer inflation relief is coming. Investors watch PPI closely as a leading indicator of both inflation trends and corporate profit margins: rising input costs that cannot be fully passed on to consumers compress margins; falling input costs expand them.

How We Color-Code the PPI

Our heatmap colors each indicator based on historically significant thresholds:

0% – 2.0% YoY

Low producer inflation — healthy margins, no CPI pressure

2.0% – 3.0% YoY

Moderate — manageable cost increases, stable margins

3.0% – 4.5% YoY

Elevated — cost pressure building, watch CPI

4.5% – 6.0% YoY

High — significant cost inflation, margin pressure

Above 6.0% YoY

Very high — strong CPI pressure ahead, margins at risk

Historical Extremes — What Happened Next?

When this indicator reaches extreme levels, history shows consistent patterns:

Mar 2022Post-COVID Supply Shock

PPI: +11.7% YoY

The highest PPI reading in 40 years accurately predicted the subsequent CPI surge to 9.1% — demonstrating PPI's leading relationship with consumer inflation.

2015-2016Oil Price Collapse

PPI: -4.0% YoY

Negative PPI driven by collapsing oil prices contributed to near-zero CPI in 2015, giving the Fed justification to delay rate hikes.

2020COVID Demand Collapse

PPI: -1.3% YoY

Sharp PPI decline during COVID lockdowns was quickly reversed as supply chains broke down and demand surged — leading to the historic PPI spike of 2021-2022.

Investor Checklist — Current Reading

Based on the current PPI reading of 9.8% YoY (Very Negative):

⚠Very high PPI — strong inflationary pipeline, expect continued CPI pressure

⚠Most challenging environment for corporate margins — input costs rising rapidly

✓Commodities, energy, and materials historically outperform in high PPI environments

ℹWatch for PPI peak — when it turns down, CPI relief and margin recovery follow in 2-3 months

Frequently Asked Questions

Why does PPI lead CPI?

Producers buy raw materials and intermediate goods, then manufacture finished products that are eventually sold to consumers. This production process takes time — typically 2-3 months from when producer costs rise to when those costs appear in consumer prices. This lag is why PPI reliably leads CPI by a similar timeframe.

What is the difference between PPI and CPI?

PPI measures prices at the producer/wholesale level — what businesses pay for inputs. CPI measures prices at the consumer level — what households pay for finished goods and services. PPI is earlier in the supply chain and more volatile; CPI is closer to the final consumer and more stable. Housing costs are a major CPI component but have less direct impact on PPI.

Can PPI fall while CPI stays high?

Yes — and this is an important signal that inflation is moderating. When PPI falls significantly while CPI remains elevated, it suggests that the inflationary pipeline is clearing and consumer prices should follow lower. The lag means investors who track PPI get 2-3 months of advance notice on CPI direction.

Which sectors are most affected by high PPI?

Manufacturing companies with thin margins and limited pricing power are most vulnerable to high PPI — they bear rising input costs without being able to fully pass them on. Consumer staples companies typically have more pricing power. Energy and commodity companies benefit from high PPI as their selling prices rise. Service companies are least affected since their main cost is labor, not materials.

Is PPI more or less important than CPI for the Fed?

The Fed focuses primarily on CPI (and PCE) when making rate decisions, not PPI directly. However, the Fed tracks PPI as a leading indicator of future CPI — when PPI is running hot, the Fed knows consumer inflation relief is still months away. PPI is more important for corporate earnings forecasting than for direct Fed policy guidance.