As inflation numbers drop, consumers are still worried about high prices

While inflation has eased slightly, according to government figures, consumers are still expressing concerns about the high prices they face every day.

When the US Federal Reserve convenes for its next meeting, the central bank is likely to cut short-term interest rates by another 25 basis points. However, it is still unclear how aggressive the central bank will be in cutting interest rates as we head into 2025.

William Emmons is an adjunct lecturer at the Olin Business School at the University of Washington. He says what we’ve seen in the news doesn’t suggest a full picture of what Americans are facing when it comes to their purchasing power.

“These headlines are just average, that’s part of it,” he said. “Older consumers, rural consumers and younger consumers who are more urban have different consumption baskets.”

Emmons is a former economist at the Federal Reserve Bank of St. Louis. He says that people who face higher prices verbalize it more, while people who benefit from lower prices in some cases may not let go of this outrage as completely – to give a truer picture of what the economy does.

As the 2024 US presidential election approaches, economists say there will be differences in how the US economy reacts to each candidate’s policies.

Emmons says there are signs that the current economic policies of both Kamala Harris and Donald Trump could trigger at least a bit of an inflationary bias in the US economy.