Producer Price Indexes

Additional Retail Trade Industries in the PPI

The Bureau of Labor Statistics (BLS) began publishing producer price indexes for additional retail trade industries in January 2001. These indexes appear in table 5 of the PPI Detailed Report and historical data back to June 2000 are available online through this website. Publication of these new indexes follows the July 2000 introduction of Producer Price Indexes (PPIs) for grocery stores (except convenience stores) and new car dealers and reflects the ongoing BLS effort to cover areas of the U.S. economy other than the mining and manufacturing sectors. These industries include:

Establishments in the retail sector are primarily engaged in purchasing goods for resale to the consumer. Given that little, if any, transformation of these goods takes place, the PPI views a retailer as a supplier of services (rather than goods). This implies that the output of a retail trade establishment can be estimated by the difference between the retail selling price of a good and the acquisition price for that same item. (Any discounts from the vendor to the retailer and any discounts offered by the retailer to the consumer are captured). The resulting gross margin prices reflect the value added by the establishment for services such as marketing, storing, displaying goods in convenient locations, and making the goods easily available for customers to purchase.

Margin weights provided to the PPI by the Bureau of the Census were used to weight retail trade at the 6-digit industry level. Item weights that are used in the PPI retail trade cells reflect margin weights for margin priced items and retail weights for retail priced items, in those rare cases when retail priced items are being measured. (A baked good that is made on the premises is an example of an item that would not have a margin price).

The PPI classifies establishments in the mining and manufacturing sectors based on their major revenue-generating activity. However, retail trade establishments are grouped using their usual trade designation. For example, many drug stores carry related product lines, such as cosmetics, toiletries, tobacco, and novelty merchandise. Therefore, a store that sells prescription drugs is treated as a drug store by the PPI when the owner states that drug store is that establishment's usual trade designation, even if the primary revenue-generating activity comes from selling non-drug merchandise.

The largest industry introduced in January 2001 is NAICS 446110—Pharmacies and drug stores. For PPI publication, this industry is categorized into prescription drugs and over-the-counter drugs and all other goods. Proportions used to allocate category weights were derived from gross-margin dollars obtained from industry trade journals.

Last Modified Date: February 16, 2012

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