Introduction
Understanding the Product Price Index (PPI) is crucial for analysing the US market trends. PPI measures the average change over time in selling prices received by domestic producers for their output.
Today’s given signal : https://t.me/calendarsignal/9984
PPI and Economic Indicators
The PPI is closely linked to other economic indicators such as GDP, employment, and consumer spending. Understanding these interconnections is crucial for gaining a comprehensive understanding of the US market.
PPI Formula
Fundamental Formula
PPI = Current price of basket/Base price of basket
Where,
Basket is the relative weight of goods and services in the current or base period.
Laspeyres Formula
This PPI formula weighs goods in proportion to their quantities in the base year.
PPI (Laspeyres) = (∑q_0 × p_t)/(∑q_0 × p_0 ) x 100
Where,
q0 = quantity in the base period
p0 = price of the product in the base period
pt = price of the product in the current year
Paasche Formula
This PPI formula weighs goods in the proportion of their quantities in the current year.
PPI (Paasche) = (∑q_t × p_t)/(∑q_t × p_0 ) x 100
Where,
q0 = quantity in the base period
qt = quantity in the current year
p0 = price of the product in the base period
pt = price of the product in the current year
Fisher Formula
This formula computes PPI as the geometric mean of PPI (Laspeyres Index) and PPI (Paasche Index).
PPI (Fisher) = √(Laspeyres Index X Paasche Index)
= √(((∑q_0 × p_t)/(∑q_0× p_0 ) x 100 ) X ((∑q_t × p_t)/(∑q_t × p_0 ) x 100) )
Among these formulae, BLS uses the Laspeyres Index formula to calculate PPI.
Previous released data results :
On last PPI data (15-11-2023) we predict to SELL XAUUSD as for PPI data strengthen the Doller so GOLD price was fall.
Check the previous blog : https://blog.forextrade1.com/us-core-retail-sales-ppi-and-retail-sales-data-15-11-2023/
Check last given signal : https://t.me/calendarsignal/9633
Performance :
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