Table 2 Changes in Price Levels (September 2024)
12-Month % Change
1-Month % Change
Consumer Price Index (1982 - 84 = 100) Core CPI (CPI Less Food and Energy) Personal Consumption Expenditures Price Index
2.4 3.3 2.1 1.8
0.2 0.3 0.2 0.0
Producer Price Index (PPI)
Description: • Consumer Price Index: Measures the average monthly change in the price of a representative basket of goods and services bought by consumers. • Core CPI (CPI less food & energy): Measures the average monthly change in prices for a typical basket of goods, excluding food and energy. • Personal Consumption Expenditures Price Index (PCE): Captures monthly changes in price levels over a wider range of consumer expenditures that account for changes in consumer behavior. • Producer Price Index (PPI): Measures the average change in selling prices received by domestic producers for their output. Output includes intermediate goods along with final goods and services. Analysis: • The CPI has shown a steady decline in inflation since the first quarter of this year, some of which can be attributed to lower energy prices. • The Core CPI which excludes food and energy has been showing a steady decrease in annual rates of inflation since the fourth quarter of 2022. • The PCE price index, which the Federal Reserve follows closely, registered a 2.1% annual increase which is very close to the Fed’s 2% target and has inspired recent cuts to the Federal Funds Rate in September and November. • The PPI measures changes in the price level of final and intermediate goods and services that upstream businesses and wholesalers purchase. As a leading indicator of inflation for consumers, the current PPI reading of 1.8% suggests few future inflationary pressures at the retail level.
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Center for Business and Economic Insight
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