By the Numbers

Economic Batting Order: PPI Rarely Follows CPI

PPI after CPI?  This morning, the Producer Price Index (PPI) will be reported at 8:30 am EST while its counterpart, the Consumer Price Index (CPI) came out last Thursday. Typically, PPI precedes CPI (in fact, many economists use PPI in their models to forecast CPI), but not this time.

This will be only the second time it has happened in the past 14 months, the 7th time since the start of 2007, and the 14th time in the past 5 years. The last time it happened was in August of this year (July data).

So why the anomaly this month? According to the US Bureau of Labor Statistics (BLS), it is driven by the differences in methodology for the indices. The CPI data is collected directly by BLS economists from retail establishments throughout the month. The PPI data is collected through a survey of 30,000 establishments with a response cut off of the Tuesday of the week that has the 13th of the month in it with exceptions for holidays and semiannual survey panel resets (this month would have been Tues Oct. 13). Due to Columbus Day falling out on Monday Oct 12 this month, the processing for PPI was delayed. The BLS never releases the CPI and PPI on the same day.

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