The Producer Price Index (PPI) is a measure of inflation from the perspective of the product manufacturer or service supplier. It measures the average change over time in the prices domestic producers receive for their output. The PPI is a combination of indexes from the Bureau of Labor Statistics (BLS) that measure the average change over time in the selling prices domestic producers get for their goods or services. It is a measure of overall economic health from the viewpoint of producers and wholesalers. The PPI is a price index that measures the average changes in prices received by domestic producers for their output. It is a measure of wholesale inflation, while the Consumer Price Index measures the prices paid by consumers. The PPI system encompasses the production of all industries in the sectors involved in manufacturing goods, including mining, manufacturing, agriculture, fishing, forestry, gas, electricity, waste, and scrap materials. The PPI is determined by taking the average weighted prices of goods and services produced in the U.S. for the current month and year, dividing it by the average weighted prices of goods and services produced in the U.S. during a base month and year, and then multiplying the outcome by 100. The PPI is used to forecast inflation and to calculate escalator clauses in private contracts based on the prices of key inputs. It is also vital for tracking price changes by industry and comparing wholesale and retail price trends.