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HELPERG Data · Guide · Economic data

CPI vs PPI: what each index measures, and monthly versus 12-month change

The CPI measures prices paid by urban consumers; the PPI measures prices received by domestic producers. How they differ, and how to compute a monthly and a 12-month change from index levels.

The short answer

Both indexes come from the U.S. Bureau of Labor Statistics (BLS) and both measure price change, from opposite ends. The Consumer Price Index (CPI) measures the prices urban consumers pay for a basket of goods and services. The Producer Price Index (PPI) measures the selling prices domestic producers receive. In BLS’s words, the PPI takes the seller’s view and the CPI the buyer’s view, so the two can move apart for long stretches.

What each index includes

Scope differences between the CPI and the PPI, as BLS describes them
CPIPPI
Whose priceswhat urban consumers paywhat domestic producers receive
Importsincluded, because consumers pay for imported goodsexcluded, because imports are not produced by domestic firms
Sales and excise taxesincluded: part of what the consumer paysexcluded: not revenue the producer keeps
Owners’ equivalent rentincludednot included
Exports, government and business-to-business salesoutside the scopewithin the scope

For the euro area, HELPERG publishes values from Eurostat’s full harmonised index of consumer prices (HICP) release (the annual rate) and from its industrial producer prices, domestic market(monthly and annual change). Eurostat’s HICP flash estimate is on the economic calendar as a release date only: HELPERG publishes no flash value. These indexes answer similar questions. Their definitions are Eurostat’s, though, so compare them with the BLS indexes only after reading both methodologies.

Monthly change and 12-month change

Both indexes are published as index levels. The percentage changes people quote are computed from those levels:

  • Monthly change = (this month’s index ÷ last month’s index − 1) × 100
  • 12-month change = (this month’s index ÷ the index for the same month a year earlier − 1) × 100

Illustrative numbers, not published data. An index stands at 320.000 this month, 319.200 last month and 311.000 in the same month a year earlier.

Worked example of a monthly and a 12-month change from illustrative index levels
ChangeArithmeticResultRounded to one decimal
Monthly(320.000 ÷ 319.200 − 1) × 1000.2506…%0.3%
12-month(320.000 ÷ 311.000 − 1) × 1002.8939…%2.9%
  • Which series. BLS states the CPI’s monthly change on seasonally adjusted indexes and its 12-month change before seasonal adjustment. Compute each from the same kind of index the publisher uses, or your figure will not match theirs.
  • Twelve months are not twelve times one month. Monthly changes compound and are noisy. 0.3% a month for a year is about 3.7%, not 3.6%, and one month says little about the year.
  • Compute from levels. Work from the index levels, not from rounded percentages. Rounding first can move the result by a tenth.

Where to see these figures on HELPERG

The economic releases page shows each published value with the time it was published. Some official interfaces publish index levels without the percentage change printed in the release. There, HELPERG computes that change from the agency’s own published index values, in exact decimal arithmetic, and labels it as computed by HELPERG. In the economic data API, the same evidence is invalues.actual.derived. Release dates are on the economic calendar. Why a figure you saw last month can now read differently is covered inpreliminary values and revisions.

Sources

The publishers’ own documentation. Where this guide describes HELPERG’s behaviour, the reference is HELPERG’s API documentation, linked in the text.

Next

See published CPI and PPI valuesAll data guides

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