In 2024, we all experienced inflation in different ways. Some felt it at the grocery store, others while traveling, or when dining out. In large part, that's because our personal economic choices dictated at least part of our experiences with inflation over the last year. The accompanying chart illustrates how uneven inflation may have felt by comparing the consumer price increases during the year.
The official Consumer Price Index report released in December showed a 12-month inflation rate of 2.7%, which was in line with Dow Jones consensus estimates. But from our experience, “averages” don’t mean too much when a person experiences inflation at their local market or auto shop.
Overall, one could argue that the inflation story is mostly positive as we head into 2025. The overall trend is lower, which has made the Fed comfortable enough to begin to lower short-term interest rates–and that can affect everything from credit card rates to car loan rates. Less money spent on interest rate charges can mean more money to spend on other things. When you check out the chart, do a self-test and see whether most of your spending falls above or below the “ALL ITEMS” rate of 2.7%.