Effects of COVID-19 Pandemic and Response on the Producer Price Index
The Producer Price Index (PPI) is a measure of the average change over time in the prices domestic producers receive for the sale of their products.
- Will data collection for PPI be affected? The PPI survey is voluntary, so it relies on business survey respondents to provide pricing information. The unavailability of survey respondents or the interruption of business operations could affect the ability to collect PPI pricing information.
- How are PPI data collected? Price data used to calculate the PPI are collected primarily online through the BLS Internet Data Collection Facility. For most industries, the PPI pricing date is the Tuesday of the week that includes the 13th of the month. If a transaction did not occur on the pricing date, the respondent is requested to provide a price for a transaction prior to that date, as close to the pricing date as possible. If no transaction occurred during the month, the respondent is requested to provide an estimate of what the price would have been, had a transaction occurred.
- What happens when PPI data cannot be collected? When BLS cannot obtain a price, missing prices are imputed by the prices of similar items that have been collected. Essentially, the price movement of items that are not collected are estimated to be the same as those in their general index category. See the "Missing prices" section on page 10 of the PPI Handbook of Methods chapter for a brief discussion of this procedure. Note that this type of imputation method is the standard operational procedure used by the PPI program each month when estimating missing prices. Imputation allows indexes to be calculated, even when a fairly small number of prices are collected.
- Will PPI industry sample updates be affected? BLS periodically updates the sample of producers providing data to reflect current conditions more accurately when the structure, membership, technology, or product mix of an industry shifts. BLS usually updates 40–50 industries a year, through three sample update cycles. The next PPI sample update is scheduled to occur with the release of June PPI data on July 10, 2020. As of the close of May 2020, a majority of the data necessary for this sample update were collected and the sample update is expected to proceed as scheduled. We anticipate that the next few sample updates will have fewer industries refreshed, reflecting challenges related to initiating establishments into the survey, which normally involves in-person data collection. On March 16, 2020, BLS suspended all in-person data collection and began conducting initiation interviews by telephone or email. PPI data collectors were instructed temporarily not to contact establishments such as physicians’ offices and manufactures of surgical and medical instruments by telephone because it would cause an undue burden on respondents. As a result, BLS will need to extend sample update cycles to collect enough data for some industries.
- Will PPI data be published as scheduled? The PPI monthly data measuring producer price change will be published as scheduled. See the schedule of PPI release dates. While it is possible that indexes will be based on a smaller than usual quantity of collected data, PPI ensures published indexes meet predefined quality standards. (See question #6.)
- Under what circumstances would some PPI data not be published? Companies voluntarily provide proprietary pricing information for the survey, so BLS goes to great lengths to ensure survey respondent confidentiality and statistical accuracy of indexes. As such, while index calculation continues, BLS may suppress some indexes. BLS would suppress indexes where a low level of response could result in the identification of survey respondents or if index quality declines to the point where BLS believes the estimated index is unreliable. All PPI data are subject to recalculation 4 months after initial publication, so it is possible indexes initially unavailable may be published 4 months after original calculation if we receive enough price information for the month.
- Will BLS attempt to quantify the overall impact of the COVID-19 pandemic on PPI estimates? The primary goal for the PPI program is to provide accurate estimates of producer price change. While it is not possible to precisely quantify the impact of the COVID-19 pandemic and response efforts on price change estimates because these effects cannot be separated from other influences on the economy, PPI can provide information on overall program response rates relative to the time period before the widespread impact of the COVID-19 pandemic and response efforts in the United States.
Last Modified Date: June 11, 2020