Just like the consumer price index (CPI), PPI is also a measure of inflation but there are key differences between the two, including:
CPI is a measure of the cost of living while PPI measures the prices change at the production level.
CPI includes excise and sales taxes while PPI doesn’t.
BLS collects price data throughout the month to calculate CPI. However, in the case of PPI, they collect data on a specific day i.e. Tuesday of the week that contains the 13th day of the month.
CPI only revolves around consumer goods while PPI only includes capital and intermediate goods.