Wholesale Price Index Definition. The Wholesale Price Index, or “WPI”, measures and tracks the changes in prices that retailers pay for finished goods. Inflationary pressures typically show up earlier at the wholesale level before they reach retail shelves. The statistic is generally calculated by reviewing the prices for a representative “basket” of wholesale goods. The survey may contain as many as 2,400 commodities. The Wholesale Price Index focuses on the price of goods bought and sold between corporations, rather than on those goods bought by consumers. The Consumers Price Index, or CPI, measures the latter. Monitoring price movements that reflect supply and demand in industry, manufacturing and construction is the primary purpose of the WPI. The process assists analysts in their interpretation of macroeconomic and microeconomic conditions. While many countries still use this process to gauge the impact of inflation, the United States, among others, has begun to rely more on the Producers Price Index as a better leading indicator.
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