Manufacturers and farmers are measured to store sells goods based on producer price index. It mainly reflects the production material price change, all goods used to measure in different stages of the cost price changes. General statistical departments to major manufacturers to collect through various products quotation data, then weighted conversion to carry hundreds of form. For example, China has 1980 changeless, 1990, changeless in 1967 as 100 index of comparison. This index released by the labor department monthly for future time (usually in 3 months after the price level rise or fall, also indicates the trend of future market price.

Therefore, the producer price index is a leading inflation index, when the production of raw materials and semi-finished goods prices, after several months, will be reflected in prices of consumer goods and on the overall price level rise, cause inflation. Conversely, when the index drops, namely production material price in the production process, will also decline to overall price level peng rang down, abate inflationary pressure. However, the data to include some commercial discount, unable to fully reflect the real price rises, so sometimes exaggerated effect. In addition, because of the changing seasons is agricultural and energy prices will also be for this price changes, periodical indexes, so use greatly influenced the index must add consolidation or eliminate food and energy prices after appropriate for analysis.

In the foreign exchange market, traders are concerned about the index. If the producer price index is expected to higher inflation, the central bank may implement, tighter monetary policy of the currency, the favorable effect good. If the producer price index fell, will bring the opposite effect.