The producer price index is considered a good predictor of future consumer prices because increases in input prices:

Question

Quizplus · Accepted Answer

Increases in input prices eventually make it to consumers when they buy the final product. Therefore, the PPI is considered a good predictor of future consumer prices because it measures the change in prices received by domestic producers for their output, which can be passed on to consumers through higher prices.

The Producer Price Index Is Considered a Good Predictor of Future