WASHINGTON, Feb 18 (Reuters) - The U.S. Labor Department will on Wednesday publish a broadened producer inflation series that economists say will offer a better view of prices received by the nation's businesses.
The shift to a final demand-intermediate demand system will see the inclusion of services and construction, and the headline Producer Price Index will now be called PPI final demand. Under the previous stage of processing system, the index was known as PPI for finished goods.
Following are some of the key changes:
FINAL DEMAND: This includes goods sold as personal consumption, capital investment, government and exports. It also includes indexes tracking prices for business purchases of goods, services and construction products.
Final demand goods have a weighting of 34.5 percent, while final demand services will account for 63.4 percent. Final demand construction will make up 2 percent of the index.
Finished goods comprise only 23.8 percent of final demand.
INTERMEDIATE DEMAND: These are purchases by business of inputs to production, excluding capital investment. It will include three main business purchase indexes.
The PPI for unprocessed goods for intermediate demand: This covers unprocessed goods sold to businesses as inputs to production. This is identical to PPI for crude goods under the prior system.
The PPI for processed goods for intermediate demand: This covers processed goods sold to businesses as inputs to production and is identical to PPI for intermediate goods under the prior system.
The PPI services for intermediate demand. These are services sold to businesses as inputs to production and is a new category. There is also a category for construction for intermediate demand.
There will be no overall intermediate demand index.
The report will also include a stage-based set of indexes that reorganize business purchases of goods and services, and construction into four stages.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)