The industrial producer price index usually responds to price changes more quickly than the consumer price index.

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The industrial producer price index measures the average change in selling prices received by domestic producers for their output and reflects changes in costs of production, such as raw materials and energy. As these costs fluctuate more frequently and sharply than consumer prices, the industrial producer price index tends to respond faster to changes in input costs and supply and demand conditions, and therefore can provide an early indicator of inflationary or deflationary pressures in the economy. By contrast, the consumer price index measures the average price level of a basket of goods and services purchased by households and reflects changes in consumer preferences, incomes, and spending patterns, which tend to be less volatile and more persistent than producer prices. Therefore, changes in consumer prices may lag behind changes in producer prices, and the consumer price index may not fully reflect the immediate impact of supply shocks or changes in business cycle conditions.

The Industrial Producer Price Index Usually Responds to Price Changes