Assignment task: The PPI takes a look at inflation-or, less frequently, deflation-from the point of view of the product or service provider. Since consumer prices are heavily influenced by producer prices, price trends for producers and consumers are unlikely to diverge for long. Due to distribution costs and government taxes and subsidies, short-term inflation at the wholesale and retail levels may differ.
What do you know about Producer Price Index (PPI) vs. Consumer Price Index (CPI)?