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

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The producer price index (PPI) measures the average changes in prices received by domestic producers for their output, and therefore reflects more immediate changes in supply and demand conditions. On the other hand, the consumer price index (CPI) measures the changes in prices paid by urban consumers for a basket of goods and services, and incorporates a lag between changes in PPI and changes in retail prices as firms may absorb some of the cost changes before passing them on to consumers. Therefore, PPI responses to price changes are generally faster than CPI responses.

The Producer Price Index Usually Responds to Price Changes More