What does CPI\PPI stand for and what does it mean?
It is a relative number to measure the price level of a representative group of consumer goods and services that changes with time in a specific period, and is used to reflect the changes in the price level of consumer goods and services purchased by households.
Consumer price statistics survey the final price of social products and services, which is closely related to people's lives and occupies an important position in the whole national economic price system.
It is an important indicator of economic analysis and decision-making, monitoring and regulation of the overall price level and national economic accounting. Its change rate reflects the degree of inflation or deflation to some extent. Generally speaking, inflation is considered to occur when prices rise in an all-round way, in contrast to changes, and it continues.
2.PPI: Producer Price Index (PPI) is an index to measure the trend and degree of ex-factory price changes of industrial enterprises, an important economic indicator to reflect the price changes in the production field in a certain period, and an important basis for formulating relevant economic policies and national economic accounting.
Producer price index (PPI) is different from CPI, and its main purpose is to measure the total cost of a basket of goods and services purchased by enterprises. Because enterprises will eventually transfer their expenses to consumers in the form of higher consumer prices, it is generally believed that the change of producer price index is useful to predict the change of consumer price index.
Extended data:
The role of CPI:
1, which measures inflation (deflation). CPI is an important indicator to measure inflation. Inflation is a general and sustained rise in the price level. The level of CPI can explain the severity of inflation to some extent;
2. National economic accounting. In national economic accounting, various price indexes are needed. Such as consumer price index (CPI), producer price index (PPI) and GDP deflator, to calculate GDP, thus eliminating the influence of price factors.
3. Contract indexation adjustment. For example, in salary negotiation, employees hope that the salary (nominal) increase is equal to or higher than CPI, and they hope that the nominal salary will be automatically adjusted with the increase of CPI. The timing of adjustment is usually after inflation and lower than the actual inflation rate.
4. Reflect the change of currency purchasing power: Currency purchasing power refers to the quantity of consumer goods and services that can be purchased by unit currency. When the consumer price index rises, the purchasing power of money decreases; On the contrary, it will rise. The reciprocal of the consumer price index is the purchasing power index of money.
5. Reflect the impact on employees' real wages: the increase of consumer price index means the decrease of real wages, and the decrease of consumer price index means the increase of real wages. Therefore, the consumer price index can be used to convert nominal wages into real wages.
6. the impact of 6.CPI on the stock market: under normal circumstances, prices rise and stock prices rise; As the price falls, so does the share price.
Baidu Encyclopedia-Production Price Index
Baidu Encyclopedia-Consumer Price Index