4 thoughts on “What does PPI mean?”

  1. Resident Consumer Price Index (CPI) Industrial Product Factory Price Index (PPI) GDP (GDP) Purchasing Manager Index (PMI) CPI is the consumer price index. Consumer Price Index, an English abbreviation is CPI, is an indicator of price changes from the statistics of goods and labor prices related to residents, and is usually used as an important indicator to observe the level of inflation. If the consumer price index rises too much, it shows that inflation has become a factor in economic instability, and the central bank will have the risk of tightening monetary and fiscal policies, causing unclear economic prospects. Therefore, the increase in the index is often not welcomed by the market. For example, in the past 12 months, the consumer price index has risen by 2.3 %, which means that the cost of living has increased by an average of 2.3 % from average 12 months ago. When the cost of life increases, your money value decreases. In other words, a 100 yuan banknotes received a year ago can only buy products or services worth 97.75 yuan today. Generally speaking, when CPI> 3%increase, we call it inflation, which is inflation; and when CPI> 5%increase, we call it Serious Inflace, which is severe inflation.
    CPI's calculation formula is CPI = (a set of fixed products calculated at the current price) divided by (a set of fixed products calculated at the base price) by 100%.
    The CPI price index index is very important, and it is inspiration. It must be carefully grasped, because sometimes the indicator is rising, the currency exchange rate is better, and sometimes the opposite.
    GDP is the abbreviation of English GROSS DOMESTIC PROCT, which is the GDP in China. The definition of GDP is usually: within a certain period of time (one quarter or one year), all the final products produced in the economy of a country or region and the total value of the market value of labor services. In economics, GDP and GNI (total national income, GROSS National Income) jointly measures indicators for the country or region's comprehensive level of economic development. This is also a measure of measurement often adopted by various countries and regions. GDP is the most watched economic statistics in the macro economy because it is considered to be the most important indicator of the development of the national economic development.
    The GDP of a country has increased significantly, reflecting the vigorous economic development of the country, increased national income, and consumption capacity. In this case, the central bank of the country will be likely to increase interest rates, tighten the supply of currency, and increase the national economic performance and rise in interest rates to increase the attractiveness of the country. On the other hand, if a country's GDP has a negative growth, it shows that the country's economy is in a decline and consumption power is reduced. At this time, the central bank of the country may reduce interest rates to stimulate the economy to grow again, and the decline in interest rates and small economic performance, and the attractiveness of the country's currency has also decreased. Therefore, generally, high economic growth will promote the rise in currency exchange rates in the country, while low economic growth rates will cause the country's currency exchange rate to fall.
    The main purpose of the producer price index (PPI): The main purpose of the producer price index is to measure the price change of various commodities at different production stages. Generally speaking, the production of goods is divided into three stages: 1. The original stage: the product has not yet been processed; 2. The intermediate stage: the product needs to be further processed; formalities.
    The real economist pays attention to PPI and the media focuses on the Core PPI. After removing food and energy, it is called the "core PPI" index to correctly judge the true trend of the price --- this is due Food and energy prices have always been affected by seasonal and supply and demand, and fluctuated violently. Core PPI will have a misleading effect in the short term.
    Because CPI includes not only the price of consumer goods, but also the service price, CPI and PPI are not strictly corresponding in statistical caliber. Therefore, it is possible that the changes in CPI and PPI are inconsistent. CPI and PPI continue to be separated, which does not conform to the law of price conduction. The main reason for the breakdown of the price transmission is that the industrial product market is in the buyer's market and the government's control of the price of public product prices.
    Under the circumstances that the price of upstream products (PPI) continues to rise, companies cannot smoothly pass the upstream costs, which will increase the final consumer product price (CPI), which will eventually lead to a reduction in corporate profits. For example, the GDP data representing economic growth and the "double drop" of CPI data representing inflation levels means that my country's macro has been significantly slowed down. And many experts are straightforward yesterday that the current risk of "hard landing" in the macroeconomic economy is increasing.
    Under the circumstances that the price of upstream products (PPI) continues to rise, companies cannot smoothly pass the upstream costs, which will increase the final consumer product price (CPI), which will eventually lead to a reduction in corporate profits.

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