As inflation cools, many consumers are wondering why prices haven’t fallen for certain goods and services. The broad trend in the US economy is disinflation – a declining, but still positive rate of inflation. In other words, prices are still rising, albeit at slower rates. Deflation refers to outright price reduction and is most common during periods of recession. According to the Bureau of Labor Statistics, deflation has emerged in a handful of consumer categories – used cars, fuel oil, and certain groceries – measured year over year. Economists attribute current deflation to normalization of once disrupted supply chains, a strong US Dollar, and increased importation of discounted goods. Still, the consumer should not be shocked by elevated prices – price increasesmay slow, but likely not decrease.
