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Inflation predicted to slow in 2024, but it doesn't mean prices will drop

Inflation predicted to slow in 2024, but it doesn't mean prices will drop
Posted at 5:39 PM, Jan 18, 2024
and last updated 2024-01-18 18:39:31-05

ROCKDALE, Texas — The Federal Reserve predicts inflation will continue to regulate in 2024, but it doesn't mean prices will drop.

  • The Federal Reserve predicts inflation will drop nearly two percent by December 2024, but prices will not necessarily decrease.
  • The rate is a drop from the 3.2 percent inflation rate in Dec. 2023.

The inflation rate is predicted to drop to two percent.
But Texas A&M Professor of Economics Dennis Jansen says the number only represents goods as a whole.

"They look at a basket of goods, and they take an average of everything that's in this basked of goods, and they say how much the prices are going to go up or down," he said.

Though the predicted rate indicates a slow down from 2022's peak 9.1 percent inflation rate and December 2023's inflation rate of 3.4 percent, Jansen says it still means prices will rise, just not as much.

Instead, predictions from specific government agencies like the USDA point to prices that consumers can expect in different industries.

The Energy Information Agency projects gas prices to fall about five percent.

Fannie Mae predicts housing prices and rent to increase about two percent.

The USDA expects food prices to increase about three percent.

Grocery prices are expected to go up 1.6 percent and restaurants meals to go up about four percent.

Consumers like Victoria Ross say they hope rates slows.

Ross says feeding a family of eight isn't cheap and has opted to shopping at local resale stores like L&L Food Salvage and Merchandise in Rockdale.

"[Prices] just go up every year. Every year, everything just goes up and up. It never goes down, up and up and up," Ross said.

She says it's cheaper than shopping at regular grocery stores where she would spend about $200 on average.

"I spend $94 and some change today and at HEB, I would've spend every bit of 200 plus," she said.

But Jansen says these rates are unpredictable.

"The Fed is not very good at forecasting inflation, and neither is anybody else, so I think you want to interpret all of this with the appropriate level of caution," Jansen said.