Consumer refusal of higher prices contributes to US inflation decline, approaching the 2% target.

The decline in US inflation may be attributed to consumers refusing to pay higher prices, leading them to seek cheaper alternatives, bargains, or avoid expensive products, according to economists. A shift toward pre-pandemic norms, when price increases were less frequent, has resulted in a steady fall in inflation towards the Federal Reserve's 2% target. However, the concern remains whether shoppers will cut back too much and negatively impact the economy, as consumer spending accounts for more than two-thirds of economic activity.

August 12, 2024
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