Inflation

When Americans talk about inflation, most would be referring to the inflation they face at the consumer level. Which would be, prices Americans are paying everyday when they go shopping. While the Producer Price Index does not specifically measure inflation at the retail level – i.e.: at the consumer level – the Producer Price Index serves as a very effective overall inflation indicator. This is so because as the cost of goods and services increase for businesses at the wholesale level – such as, increases in materials costs for home builders – those increases in costs that builders incur at the wholesale level are then often passed on to consumers at the retail level. Leading to the more widely talked about consumer inflation.