Wholesale Price Index - WPI

If you know what a price index is, then we’d guess that your guess at what a wholesale price index is...correct.

A price index tracks the changes in price of a metaphorical “basket” of goods. Price indices use big ol’ averages across entire industries, so they’re more useful for looking at changes in the market over time than for individuals (unless you’re trying to explain to grandpa that real costs in college and healthcare have indeed gone up a lot since he was your age...they’re good for that, too).

The wholesale price index tracks the changes in price in the wholesale basket of goods, i.e. goods before they get shipped off to RetailLand. Like all price indexes, the wholesale price index uses industry-wide averages, comparing one year to a past year (what's called the “base year”). You can compare how much prices have changed in one year, five years, etc. to see what the change was for that time.

While the wholesale price index, or WPI, is pretty common in the world, it’s not in the U.S., which chooses to use the producer price index instead (like the rebellious child that the U.S. is).

See: Price Index.