Jan 17 -- The Bureau of Labor Statistics (BLS) invites comments to OMB by February 16, 2024 regarding the extension of the Producer Price Index (PPI) Survey to 2027.
The Producer Price Index (PPI), one of the Nation's leading economic indicators, is used as a measure of price movements, as an indicator of inflationary trends, for inventory valuation, and as a measure of purchasing power of the dollar at the primary market level. It also is used for market and economic research and as a basis for escalation in long-term contracts and purchase agreements. The purpose of the PPI collection is to accumulate data for the ongoing monthly publication of the PPI family of indexes.
The Producer Price Index (PPI) is a Principal Federal Economic Indicator consisting of a family of indexes that measures the average change over time in the selling prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser's perspective. About 10,000 PPIs for individual products and groups of products are released each month. The PPI data are widely used by the business community as well as by government and academia. In particular, the data are used as an economic indicator playing a crucial role in market analysis, as a deflator of other economic series, the basis for the calculation of price adjustments for contracts and purchase agreements, and as an input to economic research. These uses highlight the necessity of the PPI in order to understand the economy. The legal authority to collect information necessary for the publication of the PPI is contained in Title 29, Section 2, of The Code of Laws of the United States of America.
The Bureau of Labor Statistics (BLS) divides price measurements into three areas. The first one, consumer prices, measures the change in prices the typical consumer pays. The second, international prices, measures the changes in prices importers pay and exporters receive. The last one, producer prices, measures the change in prices received by domestic producers for the products and services they make and sell. The current framework for PPI sampling and data collection is the classification structure of the North American Industry Classification System (NAICS). PPIs are available for the output of nearly all industries in the goods-producing sectors of the U.S. economy— mining, manufacturing, agriculture, fishing, and forestry— as well as natural gas, electricity, and goods competitive with those made in the producing sectors, such as waste and scrap materials. The PPI program also currently publishes price indexes for 136 service industries as well as 9 non-residential construction industries. The PPI now covers about 68.8% of in-scope services domestic output and about 17% of construction domestic output as measured by the 2017 Census Value of Shipments.
In fiscal year 2020, PPI and BLS’s Import Price Index (MPI), introduced a satellite set of net inputs to industry price indexes. These new indexes measure price change for both domestically produced and imported inputs consumed by most 3-digit NAICS industry groupings, excluding capital investment and labor. The new satellite series are complimentary to official indexes and are produced and published separately from the existing official PPI inputs to industry series. The new data series improves upon the existing net inputs to industry price indexes by adding prices for imported inputs of goods. The satellite series also represents a major coverage expansion relative to the official input price indexes, which are only available for construction industries and a very limited number of mining, manufacturing, and services industries. The new data provide business users with additional data options for industry cost analysis, price transmission analysis, contract escalation, and deflation of revenue streams, removing the effects of price changes and converting nominal revenue into real revenue. Each month beginning with the initial data release, PPI and MPI post an Excel file on a new web page with data for the current period and revised data for the four months prior. Data in the table are published at the third decimal place level of precision.
The PPI program is increasing its use of non-traditionally collected data to mitigate respondent burden, address a decrease in collected prices, and to supplement indexes such that PPI published indexes continue to meet publication criteria. For example, beginning in 2018 PPI began using a large, purchased database for financial services within the U.S. economy. PPI is using this source to replace directly-collected data for municipal debt securities dealing, corporate debt securities dealing, and equities securities dealing in the investment banking and securities dealing industry. In 2022, PPI used non-traditionally collected data sources to expand coverage to include pipeline transportation of natural gas and feeder and replacement cattle. In 2023, PPI partially replaced traditionally collected data for coal with non-traditionally collected data. The PPI program continues to look for opportunities to increase its use of secondary source data, but at the current time there is not a widespread availability of data that include the necessary inputs for estimating the change in prices that producers receive for the goods they produce and the services they provide.
PPI continually looks to refine its data collection procedures to reduce respondent burden. In fiscal year 2021, PPI initiated a pilot effort to bypass the initiation process of selecting items and disaggregation and simply to request a respondent-provided dataset of price information for the category. The pilot was successfully completed and several respondents from the pilot are now providing PPI with large data sets monthly. Based on this pilot, PPI is currently developing standard procedures to collect respondent-provided datasets of price information data for predesignated survey units in selected industries. In 2023, PPI implemented a new policy to reduce respondent burden during the initiation interview. This new policy simplifies the disaggregation process implemented by field economists to select items for monthly repricing during the initiation interview.
PPI
https://www.bls.gov/ppi/
BLS submission to OMB:
https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202310-1220-003 Click IC List for information collection instrument, View Supporting Statement for technical documentation. Submit comments through this webpage.
FRN:
https://www.federalregister.gov/d/2024-00778
For AEA members wishing to submit comments, "A Primer on How to Respond to Calls for Comment on Federal Data Collections" is available at
https://www.aeaweb.org/content/file?id=5806