Producer and Consumer Price Index Increase Throughout 2024

The Capital District Regional Planning Commission (CDRPC) has released updated Producer Price Index (PPI) and Consumer Price Index (CPI) data, covering the period from June 2024 to December 2024. These indices provide vital insights into the Capital Region’s economy, offering a snapshot of how businesses and consumers are experiencing changes in prices during this six-month period.

Producer Price Index (PPI): The Producer Price Index (PPI) measures the average change over time in the selling prices received by domestic producers for their output. Prices included in the PPI are based on the first commercial transaction for many products and some services. This index reflects the cost pressures facing businesses, which can influence the prices consumers pay later on.

Consumer Price Index (CPI): Measures changes in the prices paid by households for a typical basket of goods and services, such as food, transportation, and housing. It’s a critical indicator of inflation and purchasing power.

Both indices are essential for understanding economic dynamics, helping businesses, policymakers, and residents navigate economic challenges and opportunities.

Producer Price Index

The Producer Price Index (PPI) shows an overall upward trend from January 2024 through July 2024, with the index rising from 251.306 to 257.321 (2.39%) between these months. This increase indicated that producers were receiving higher prices for their goods and services during this period. For example, this rise could suggest that costs for raw materials, labor, or other inputs were increasing, which could later affect consumer prices.

From July 2024 to September 2024, PPI experienced a decline. The index dropped from 257.321 to 52.684 (1.80%) between these months. After September 2024 PPI stabilized, showing a gradual increase again from 252.684 in September 2024 to 253.548 in December 2024 (0.34% increase).

Overall, PPI data for 2024 indicates that the Capital Region experienced moderate inflationary pressures throughout the year, with a notable increase early in the year and a slight pullback mid-year. Over the course of 2024, the PPI increased by 2.24, or by 0.90% (from 251.306 in January to 253.548 in December). When compared to 2023, the PPI in 2024 remained more stable, with smaller fluctuations and less volatility in the second half of the year.

Looking at a broader historical context, the PPI in the Capital Region has shown a significant increase since the onset of the pandemic. For example, in April 2020, the PPI was 185.50, but by April 2024, the PPI had risen to 256.98, marking an increase of 71.48, or 38.53%. This sharp rise reflects the broader inflationary trends that followed the pandemic, including supply chain disruptions, labor shortages, and shifts in demand patterns. The recovery in 2024 shows some stability, but the long-term trend still reflects the lingering impacts of those pandemic-era disruptions of which are higher average PPI values than pre-pandemic.

Consumer Price Index

Consumer Price Index (CPI) is a measure used to track the average change in prices paid by urban consumers for a basket of goods and services over time. It reflects the cost of living by measuring price changes in categories such as:

  • Apparel and Upkeep
  • Education and Communication
  • Food and Beverages
  • Housing
  • Medical Care
  • Recreation
  • Transportation
  • Other Goods and Services
  • All Items (Composite Index)

The CPI is calculated by taking the prices of a specific set of goods and services, known as the “market basket,” and comparing them to the prices of the same items during a base period. The changes in the CPI are used to assess price changes in these categories over time and help reflect the overall inflation rate.

From January 2024 to December 2024 CPI changed as shown below:

  • Apparel and Upkeep: +2.15%
  • Education and Communication: +0.21%
  • Food and Beverages: +1.85%
  • Housing: +3.26%
  • Medical Care: +2.15%
  • Recreation: +0.36%
  • Transportation: +2.10%
  • Other Goods and Services: +2.41%
  • All Items (Composite Index): +2.33%

All categories of the CPI have experienced increases from the beginning to the end of 2024, with the housing category seeing the largest rise at 3.26%. This pattern reflects the general trend of rising prices across all sectors over time, indicating ongoing inflationary pressure throughout the year and the last decade.