Special aggregate index of the Services Producer Price Index (SPPI) based on labor cost ratio
June 18, 2024
YUTANI Takemaro, HOWARD Edmundmichikazu*, YOSHINO Tomoaki**, HIGASHI Masato***
*Currently at the Kobe Branch
**Currently at the Fukushima Branch
***Currently at the International Department
Research and Statistics Department
Abstract
Focusing on the cost structure of service production activities, this paper reclassifies the Services Producer Price Index (SPPI) based on the labor cost ratio. Services with low labor cost ratio are strongly affected by input goods' prices and market conditions, while services with high labor cost ratio are strongly affected by labor market conditions, as well as wage trends, reflecting the impact of labor costs on overall costs. The "Special aggregate index based on labor cost ratio," which was first included in the SPPI 2020 base index, will help capture the impact of labor costs on the underlying inflation trend of the SPPI.
Notice
The Bank of Japan Review Series is published by the Bank to explain recent economic and financial topics for a wide range of readers. This report, 2024-E-6, is a translation of the Japanese original, 2024-J-9, published in June 2024. Views expressed are those of the authors and do not necessarily reflect those of the Bank.
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