Glossary
WPU vs PCU series
WPU and PCU are the two BLS Producer Price Index series-code families. WPU codes track a commodity by what it is; PCU codes track the output prices of an industry defined by NAICS code. Many materials appear in both, at different values.
Also called: WPU series, PCU series, commodity vs industry PPI.
A WPU series answers "what did this material cost", grouped by product:
WPU101707 is cold-rolled steel sheet and strip regardless of who made it.
A PCU series answers "what did this industry charge for its output",
grouped by NAICS: PCU3311 is iron and steel mills.
For a contract buying a specific material, a WPU commodity series is
usually the closer fit. For a contract buying an industry's mixed output,
or where the counterparty's own price list tracks an industry benchmark, a
PCU series can fit better. The two can diverge in a given quarter because
an industry's product mix shifts.
Search users often type the bare code, for example pcu333611333611, so the
contract should carry the exact string, prefix included.
See PPI and
the steel PPI escalation clause.
Related terms
An averaging window is the number of consecutive published index values a price escalation clause averages before using the result in its formula. A 3-month window smooths a single volatile month; a 1-month window tracks the latest value exactly.
The base period is the month whose published index value a price escalation clause treats as the starting point. Every later adjustment compares a current index value to the value from this fixed month, usually the month of contract signing or bid submission.
A cap is the maximum price adjustment an escalation clause will pass through in a period; a floor is the minimum. Together they bound how far the covered price can move regardless of how far the index moves.
A collar is a cap and a floor used together on the same escalation clause, so the price adjustment is confined to a band, for example no more than plus 6 percent and no less than minus 6 percent in any year.
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