Economic Rates (CPI, PPI…)

The prime rate and federal funds rate may be the most widely known interest rates however many more financial measures are key to economic growth. Some of these involve future prices, consumer sentiment, payroll numbers and unemployment rates. To the right you will find an automatically updated feed for all the major US economic indicators. Below are definitions for the some of the most common financial acronyms heard.

CPI: Consumer Price Index

The CPI is a measure of the average price of consumer goods and services purchased by households. Each country has a specific CPI whereas any percent change is a measure of inflation for the particular region.

 

PPI: Producer Price Index

The PPI measures the average change over time in the selling prices received by domestic producers for their output. Prices included in the calculation of the PPI figures are used deriving data from the first commercial transaction for many products and some services.

 

GDP: Gross Domestic Product

The GDP is one of the measures of national income and output for a given country’s economy. In pure definition, the GDP is defined as “the total market value of all final goods and services produced within the country for a given period of time”. Most GDP calculations use the calendar year as the given period of time.

 

PCE: Personal Consumption Expenditures

THE PCE index is an indicator of the average increase in prices for all domestic personal consumption. In addition to the PCE index the FOMC also reports a “Core PCE Price index” which is a less volatile measure of personal consumption expenditures since it excludes the more volatile and seasonal food and energy prices.

 

Non-Farm Payroll

This statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding the following employees:

• General government employees
  
• Private household employees
  
• Employees of nonprofit organizations that provide assistance to individuals
  
• Farm employees

The total non-farm payroll accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States. The non-farm payroll statistic is reported monthly, on the first Friday of the month, and is used to assist government policy makers and economists determine the current state of the economy and predict future levels of economic activity.