BLS Official Signals Increased Risk of Consumer Inflation via PPI

Scott Sager, who works at the Bureau of Labor Statistics, explained that the Producer Price Index measures price changes producers receive for selling their products or services. He stated that September producer data increases the risk of more consumer inflation because these rising prices represent an input cost for producers. The process of producers passing these costs to consumers takes time.

The PPI provides insight into the costs faced by businesses before those costs are passed down to the public. Sager raised the question of how comfortable producers feel passing these rising input costs onto wholesalers, retailers, and consumers. This information guides economic expectations regarding future inflation.