WPI vs. CPI
Divergence and the "Inflation Pass-Through"
WPI and CPI often diverge because they measure different things in different markets. WPI measures prices before retail margins, taxes, and transportation costs are added. CPI includes all these plus services (which are not in WPI). When WPI rises faster than CPI, it signals that producers are absorbing margin pressure or that the cost-push has not yet passed through to consumers. When WPI is lower than CPI, it may indicate demand-pull inflation at the retail level. The gap between the two is closely watched by analysts.
- January 2026: WPI = 1.81%; CPI = 2.75% (new series) — CPI higher than WPI
- Pass-through: WPI → wholesale market → retail market → CPI; typically takes 1-3 months
- Services: Not included in WPI; heavily weighted in CPI — a key structural divergence
- GDP deflator: A broader price measure that covers all goods and services in GDP; different from both WPI and CPI
- WPI used for: Deflating manufacturing sector data in national accounts; indexation of some commodity contracts
● Tracked since February 16, 2026 · last seen May 14, 2026 · updates as the daily brief publishes
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