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Inflation is Slowing

November 20, 2023

Inflation is slowing – what does that mean for you?

That Thanksgiving turkey will be just a bit cheaper than it was a year ago! The cost of a traditional Thanksgiving feast for 10 people has dropped 4.5 percent from 12 months ago to $61.17, or $6.12 a person, according to the American Farm Bureau Federation in a November report.

Over the last couple of years, sticker shock at the grocery store – everywhere, really; who are we kidding? – has been a real blow to the budget. Things get tricky when buying food takes a bigger bite out of your wallet. But a cheaper turkey, mashed potatoes and stuffing is just one of many signs that price increases are moderating, which is good news for borrowers, and the economy in general. It’s likely good news for you as well (but perhaps not so much for turkeys).

Family eating Thanksgiving dinner

The consumer price index (CPI) in October increased by just 0.2%, representing the smallest monthly increase since September 2021, according to government data released earlier this month. The core CPI reached a two-year low as well. Energy costs were notably lower, and the price of many high-cost items fell, including used vehicles, airlines tickets, hotel rentals and more.

One month’s data does not guarantee inflation will continue to fall, but this was the goal when the U.S. Federal Reserve began increasing interest rates in 2022.

So, what does slowing inflation mean for you?

  • Interest rates are expected to moderate in the coming months.
  • The price of many goods and services will also stabilize.
  • Fear of a recession in 2024 is losing steam.

The Federal Reserve aims to get the core inflation rate to around 2 percent. It currently sits just above 3 percent, so while interest rate decreases may not happen for several months, borrowing is unlikely to get more expensive. In fact, the hope is the cost of borrowing will decrease in 2024.

If this happens, car loans and mortgages – and any loan – will become more affordable. On the other hand, interest earned on certificates of deposit, savings and checking accounts may fall. Investors and holders of 401K accounts often see higher returns during periods of lower interest rates. (past performance does not guarantee future results)

Best of all Community Choice can help! We offer a variety of tools to help you effectively manage your finances so that you can lead the life you desire. Here are some things to consider in the short-term:

As always, contact us at 877.243.2528 with questions. We’ll try to help you gobble up ways to save a few bucks whenever we can!

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