Finance
Here’s the deflation breakdown for September 2024 — in one chart
Jeff Greenberg | Universal Images Group | Getty Images
Inflation has eased gradually across the broad U.S. economy — and some areas of consumer spending, like furniture and gasoline, have even deflated over the past year.
Deflation is when prices decline for goods and services.
It’s rare for prices to fall from their current levels across the economy at large, economists said.
However, prices for many physical goods have deflated as supply-and-demand dynamics return to normal following pandemic-era contortions.
“Outside of goods prices, I don’t think we’ll see price cuts,” said Mark Zandi, chief economist at Moody’s.
“[Businesses] will hold the line on price if demand is soft but outright price declines are very rare, and even in a recession are not common,” Zandi said.
Additionally, prices for energy and food commodities can be volatile, so it’s not unusual to see swings up and down. Consumer electronics also continually improve in quality, a dynamic that statisticians equate to deflation but which may only be apparent on paper and not at the store.
Which goods prices have deflated
Average prices for “core” goods — commodities that exclude food and energy — have deflated by about 1% since September 2023, according to the consumer price index.
Demand for physical goods soared in the early days of the Covid-19 pandemic. Consumers were confined to their homes and couldn’t spend on things such as concerts, travel or dining out. Households also had more discretionary income, as they pulled back on spending and had more cash from federal aid.
The pandemic also snarled global supply chains, meaning goods weren’t hitting the shelves as quickly as consumers wanted them.
Such supply-and-demand dynamics drove up prices.
Now, those contortions have largely eased and prices have declined as a result, economists said.
For example, prices for household furnishings have fallen about 2% over the past 12 months, as have those for appliances (down 3%), tools and hardware (4%), women’s outerwear (6%) and sporting goods (2%), according to CPI data.
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Vehicles have also “been one of the key areas of goods deflation,” said Sarah House, senior economist at Wells Fargo Economics.
New and used vehicle prices have deflated by 1% and 5%, respectively, since September 2023.
It’s natural to see some “give back” in price since vehicles saw among the largest spikes when inflation began to pop in 2021, House said. In June 2021, for example, used car prices were up 45% from a year earlier.
The U.S. Federal Reserve also raised interest rates aggressively to combat high inflation, leading to pricier financing costs for car buyers. That served to weaken demand, which also pushed down prices, economists said. The Fed began an interest-rate-cutting cycle in September.
Outside of supply-demand dynamics, the U.S. dollar’s strength relative to other global currencies has also helped rein in prices for imported goods, economists said. This makes it less expensive for U.S. companies to import items from overseas, since the dollar can buy more.
Energy, food and consumer electronics
Outside of imported goods, consumers may also see a “normalization” of prices in food and energy, Zandi said. They’re influenced by “big swings in commodity prices, the value of currencies and trading relationships,” he said.
For example, regular unleaded gasoline prices have declined by about 16% since September 2023, according to CPI data.
Food prices are also generally underpinned by their own unique supply-and-demand dynamics. Categories like apples, potatoes, frozen vegetables and fresh fish and seafood have seen prices deflate by about 11%, 4%, 2% and 1%, respectively.
The quality of consumer electronics such as televisions, cellphones and computers also continually improves, meaning consumers generally get more for the same amount of money. The U.S. Bureau of Labor Statistics, which compiles the monthly CPI report, equates that to a price decline in the inflation data.
Finance
Treasury Secretary Bessent says market woes are more about tech stock sell-off than Trump’s tariffs
Treasury Secretary Scott Bessent speaks to reporters outside the West Wing after doing a television interview on the North Lawn of the White House on March 13, 2025 in Washington, DC.
Andrew Harnik | Getty Images
Treasury Secretary Scott Bessent said Wednesday the sell-off in the stock market is due more to a sharp pullback in the biggest technology stocks instead of the protectionist policies coming from the Trump administration.
“I’m trying to be Secretary of Treasury, not a market commentator. What I would point out is that especially the Nasdaq peaked on DeepSeek day so that’s a Mag 7 problem, not a MAGA problem,” Bessent said on Bloomberg TV Wednesday evening.
Bessent was referring to Chinese AI startup DeepSeek, whose new language models sparked a rout in U.S. technology stocks in late January. The emergence of DeepSeek’s highly competitive and potentially much cheaper models stoked doubts about the billions that the big U.S. tech companies are spending on AI.
The so-called Magnificent 7 stocks — Apple, Amazon, Tesla, Alphabet, Microsoft, Meta and Nvidia — started selling off drastically, pulling the tech-heavy Nasdaq Composite into correction territory. The tech-heavy benchmark is down about 13% from its record high reached on December 16.
However, the secretary downplayed the impact from President Donald Trump’s steep tariffs, which caught many investors off guard and fueled fears of a re-acceleration in inflation, slower economic growth and even a recession. Many investors have blamed the tariff rollout for driving the S&P 500 briefly into correction territory from its record reached in late February. Wall Street defines a correction as a drop of 10% from a recent high.
S&P 500, YTD
Trump signed an aggressive “reciprocal tariff” policy at the White House Wednesday evening, slapping duties of at least 10% and even higher for some countries. The actions sparked a huge sell-off in the stock market overnight, with the S&P 500 futures declining nearly 4% and the blue-chip Dow Jones Industrial Average shedding 1,100 points. The losses will likely but the S&P 500 back into correction territory in Thursday’s session.
“It’s going to be fine if we put the best economic conditions in place,” Bessent said in a separate interview on Fox Wednesday evening. “If you go back and look, the stock market actually peaked on the [DeepSeek] Chinese AI announcement. So a lot of what we have seen has been just an idiosyncratic tech sell-off.”
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