Price level indicators. Now, price level indicators are the level of prices of goods and services throughout the economy, and it measures the change in price levels over time. Now, here in the US, there are three major measurements that are often referred to by economists, analysts, and government policymakers. The first, the CPI, the GDP Deflator, and the PPI, the Producer Price Index. Now, as I mentioned, it's used by Central Banks to monitor inflation levels, but doesn't end there. Obviously, everyone making investments has a keen interest in price levels going forward. Now, you know, low inflation, but not deflation, is good for stimulating the economy, and specifically, consumer spending, corporate profits, and ultimately the stock market. And that's why it's so important. On the other hand, increased inflation can be a sign of overheating economy and potentially higher interest rates, which would be negative for risky assets. Now let's dig deeper into the CPI. Now, the CPI measures the average monthly change of prices that we pay, that consumers pay for goods and services paid by urban customers between two time periods. So it includes virtually every sector, food, clothing, shelter, fuels, transportations, et cetera. And it's collected on a monthly basis and includes about 90% of the population, or 88%. And that speaks to the urban word in the definition, so it includes most consumers, but not all. And it's used to recognize periods of inflation and deflation. Significant increases in the CPI, within a short period of time, especially, might indicate a period of inflation. And significant decreases in the CPI might indicate a period of deflation. Now, because the CPI includes two very volatile sectors, and that's food and energy, it might not be a reliable measure, in certain instances, to measure inflation and deflation. So for a more accurate number, a lot of analysts and economists look at what we call the core CPI number. And the core CPI number is the CPI less food and energy. So in summary, again, the general broad CPI number, known as the headline inflation number, refers to the inflation rate calculated based on the price index that includes all goods and services in the economy. Core number usually refers to the inflation rate calculated based on a price index that excludes food and energy. Now, even though the ultimate goal of policymakers here in the US, is to control that headline inflation number, the price level of all goods and services, they often choose to focus on the core number when reading the trend in the economy and making economic policies. And that's because policymakers are trying to avoid an overreaction to potential short-term fluctuations in food and energy that might not have a significant impact in the future headline inflation number. Now moving on to the Producer Price Index or the PPI. Now the difference here, is it measures the average change in prices over time in the selling prices. Not what consumers pay, but what the selling price is for domestic producers of goods and services. And PPI data can be broken down by industry for nearly all industries here in the US, which is of extreme importance to an analyst or an asset manager focusing on a specific industry or security. It includes the first commercial transaction, or what we know as the wholesale price. So it's capturing the price that the producer is selling to distributors or wholesalers. Now, the Wholesale Price Index was the name of this measurement actually, up until 1978, until it transitioned to what we know now as the PPI. And actually, in some countries, the PPI is still called a name similar to the Wholesale Price Index. And just like the CPI, the PPI is used to recognize periods of inflation and deflation. And because price increases that we see in the PPI may eventually pass through to customers, the ultimate customers, the PPI can influence the future CPI. So it's a great levy indicator of potentially growing prices or increasing prices for the consumer. And a key difference between the CPI and the PPI, is that the PPI excludes imports and includes exports in its calculation, so it's a lot more US-focused. And lastly, just like the CPI, the PPI has a headline number and a core number where the core number strips out those two volatile sectors of food and energy, to better analyze the trends in the data.