The Effects of Oil Prices on Inflation
- Inflation is tracked with two metrics primarily: consumer price index (CPI) and producer price index (PPI).
- Each series is indexed for the year 1982.
- CPI roughly tracks the cost of a hypothetical basket of goods at the consumer level whereas PPI tracks the same basket of goods at the producer level.
- Fluctuations in oil prices have a far greater correlation to PPI than to CPI.
- The transportation costs of goods to their final sales markets are included in producer price index rather than consumer price index, explain this relationship.
Grouped by Metric
Grouped by Index
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