Producer prices rose 3.2 percent in November, the biggest rise in 34 years, on a record rise in gasoline prices, the Labor Department said on Thursday.
The producer price index rose an unexpectedly large 0.4 percent, the heftiest gain since February. When cars and light trucks also were stripped out, core producer prices rose 0.1 percent, Reuters reports.
The Producer Price Index (PPI) measures average changes in prices received by domestic producers for their output. The PPI was known as the Wholesale Price Index, or WPI, up to 1978. The PPI is one of the oldest continuous systems of statistical data published by the Bureau of Labor Statistics, as well as one of the oldest economic time series compiled by the Federal Government.
The origins of the index can be found in an 1891 U.S. Senate resolution authorizing the Senate Committee on Finance to investigate the effects of the tariff laws “upon the imports and exports, the growth, development, production, and prices of agricultural and manufactured articles at home and abroad.”
The Producer Price Index family of indexes consists of several major classification systems, each with its own structure, history, and uses. However, indexes in all classification systems now draw from the same pool of price information provided to the Bureau by cooperating company reporters. The three most important classification structures are industry, commodity, and stage of processing (SOP).