Improvements to the Producer Price Index measure: The Final-Demand-Intermediate-Demand System

Abstract

[Excerpt] The release of January 2014 Producer Price Index (PPI) data marks the transition from the Stage of Processing (SOP) aggregation system to the Final Demand–Intermediate Demand (FD–ID) aggregation system. The transition to the FD– ID system is the culmination of a longstanding PPI objective to improve upon the SOP aggregation system by incorporating price data for services, construction, government purchases, and exports. In comparison to the SOP system, the FD-ID system more than doubles PPI coverage of the U.S. economy to over 75 percent of in-scope domestic production. This issue of Beyond the Numbers presents 2013 PPI data based on the new FD–ID system. The PPI estimates shown with this system represent the beginning of wider coverage by the index, to be continued in subsequent issues.