The wholesale price index (WPI) is an economic indicator that measures and tracks the changes in the price of goods in the stages before the retail level. Here is a brief definition:
- The WPI measures price changes in domestic wholesale markets across industries like mining, manufacturing and electricity.
- It tracks wholesale, or bulk, prices received by domestic producers for their output.
- Prices measured are for goods sold in wholesale or “bulk” quantities (typically truckload or larger shipments).
- The WPI is published regularly (usually monthly) by government agencies to help understand producer price inflation trends.
- An increase in the WPI from period to period indicates a rise in wholesale inflation.
- The index is often compared to the Consumer Price Index (CPI) which tracks prices at the retail level facing consumers.
- Fluctuations in the WPI reflect changes occurring in domestic wholesale markets and serve as an early indicator of retail price movements.
So in summary, the Wholesale Price Index is an important macroeconomic measure of inflation at the wholesale stage of distribution before products reach consumers.