Producer Price Index (PPI) and Consumer Price Index (CPI)?

Question

If PPI continue to increase and CPI continue to go down, what will happen to the economy?

Answer 1

A Producer Price Index (PPI) measures average changes in prices received by domestic producers for their output. It is one of several price indices calculated by national statistical agencies.

Its importance is being undermined by the steady decline in manufactured goods as a share of spending.

A consumer price index (CPI) is a measure of the average price of consumer goods and services purchased by households. It is one of several price indices calculated by national statistical agencies. The percent change in the CPI is a measure of inflation. The CPI can be used to index (i.e., adjust for the effects of inflation) wages, salaries, pensions, or regulated or contracted prices. The CPI is, along with the population census and the National Income and Product Accounts, one of the most closely watched national economic statistics.