One chart provides the deflation breakdown for October 2024.

• Over the past year, consumer items have seen a decline in prices, a phenomenon referred to as deflation.
• As pandemic-era supply-and-demand distortions normalize, economists predict a shift towards physical goods, such as new cars, appliances, and consumer electronics, being largely in demand.

Prices for many household items have decreased due to inflation slowing down from its pandemic-era peak.

Generally, businesses in the U.S. economy do not experience deflation on a broad, sustained scale.

Prices for physical goods such as new cars, appliances, sporting goods, consumer electronics, and certain apparel have decreased over the past year, according to the consumer price index.

Stephen Brown, deputy chief North America economist at Capital Economics, stated that we are observing deflation to some extent.

Prices have decreased as supply and demand dynamics have normalized, according to economists. Additionally, the U.S. dollar has been strong against major currencies, making imported goods cheaper.

As a result of supply chains becoming normalized and deflation moderating to a significant degree, Mark Zandi, chief economist at Moody's, stated that deflation has "moderated to a pretty significant degree."

Where there has been deflation

Since October 2023, the CPI data shows that all physical goods have experienced a 1% decrease in prices.

The figure represents "core" goods, excluding food and energy commodities whose prices can fluctuate.

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According to the CPI, appliances were approximately 2% less expensive in October compared to the same time last year.

The prices of clocks, lamps, decorative items, dishes, flatware, women's outerwear, children's apparel, toys, pet products, and new cars have all decreased annually.

The prices for certain categories, such as furniture and bedding, men's clothing, cosmetics, and used cars and trucks, have decreased from October 2023. However, they have slightly increased in recent months, as indicated by CPI data.

The resumption of deflation for used cars and trucks is expected since "wholesale prices have fallen recently, and supply and demand continues to improve in the sector," according to Bank of America economists in a research note on Monday.

Energy prices and electronics

Gasoline prices are also "way down," Zandi said.

The cost of gas has decreased by more than 12% in the past year, according to CPI data. On average, drivers paid $3.05 a gallon at the pump as of Nov. 11, according to the U.S. Energy Information Administration.

Zandi stated that consumers could experience more relief due to the softness of global oil prices.

According to Zandi, the softness in anticipation of President-elect Donald Trump's proposed policies around China may include tariffs of at least 60% on goods imported from China, a nation with a huge appetite for oil. If Trump's policies were to negatively affect the Chinese economy, they'd also likely dampen China's oil demand.

The decline in fuel oil prices, which is over 20% in the past year, should lead to lower prices for other energy commodities refined from oil, economists said.

Economists stated that food prices are influenced by their own supply-and-demand dynamics, and for instance, turkey, snacks, and bacon are currently 4% cheaper than they were a year ago.

Lower energy prices can reduce the cost of transporting and distributing food to grocery stores, which can lead to lower food prices.

According to CPI data, computers, video equipment, and smartphones have experienced price declines of 5%, 10%, and 9%, respectively, compared to a year ago.

The prices may not be available in-store.

Economists stated that the Bureau of Labor Statistics measures inflation for specific consumer goods, like electronics, in a particular way.

The BLS incorrectly interprets technology's continuous advancements as a decrease in prices, leading to the illusion of falling prices on paper.