Here’s the deflation breakdown for July 2024 — in one chart
Fotostorm | E+ | Getty Images
Inflation cooled below 3% in July 2024, the first time it dropped beneath that level in more than three years.
While many areas of the U.S. economy are disinflating — meaning their prices are still rising, though at a slower rate — some have been outright deflating. That means their prices have actually declined.
Deflation has largely occurred for physical goods, though it has also appeared in categories such as airline fares, gasoline and various food items, according to the consumer price index.
These are “micro pockets” of deflation, said Joe Seydl, senior markets economist at J.P. Morgan Private Bank.
But the deflationary dynamic is less widespread than it was earlier in the pandemic, when the unwinding of contorted supply-and-demand dynamics made it more pronounced, economists said.
“Broadly speaking, deflation for various items is increasingly less broad-based,” said Mark Zandi, chief economist at Moody’s.
Consumers shouldn’t expect a broad and sustained fall in prices across the U.S. economy. That generally doesn’t happen unless there’s a recession, economists said.
Why goods prices have fallen
“Core” goods — commodity prices excluding those related to food and energy — have declined by about 2% since July 2023, on average, according to CPI data.
They fell 0.3% during the month, from June to July 2024.
Demand for physical goods soared in the early days of the Covid-19 pandemic as consumers were confined to their homes and couldn’t spend on things such as concerts, travel or dining out.
The health crisis 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.
The environment has changed, however.
To that point, the initial pandemic-era craze of consumers fixing up their homes and upgrading their home offices has diminished, cooling prices. Supply-chain issues have also largely unwound, economists said.
Furniture and bedding prices are down more than 5% since July 2023, according to CPI data. Prices have also fallen over the past year for dishes and flatware (down about 8%), laundry equipment (-6%), nonelectric cookware (-10%), toys (-3%), and tools and hardware (-1%), according to the CPI.
Apparel prices are also down, for men’s and women’s outerwear (-12% and -4%, respectively), and infants and toddlers’ apparel (-4%), for example.
More from Personal Finance:
Social Security cost-of-living adjustment may be 2.6% in 2025
Here’s the inflation breakdown for July 2024
A U.S. construction boom is sending rents lower
Prices for new and used vehicles have fallen by 1% and 11%, respectively, since July 2023. Car and truck rental prices have deflated about 6%.
Car prices were among the first to surge when the economy reopened broadly early in 2021, amid a shortage of semiconductor chips essential for manufacturing.
“Vehicle prices remain under pressure from improved inventory and elevated financing costs,” Sarah House and Aubrey George, economists at Wells Fargo Economics, wrote in a note in July.
Higher financing costs are the result of the Federal Reserve raising interest rates to tame high inflation. Economists expect central bank officials to start cutting rates at their next policy meeting 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 goods, economists said. This makes it less expensive for U.S. companies to import items from overseas, since the dollar can buy more.
Long-term forces such as globalization have also helped, by increasing imports of more lower-priced goods from China, economists said.
Deflation for airfare, food and electronics
Daniel Garrido | Moment | Getty Images
Airline fares have declined about 3% over the past year, according to CPI data.
The drop is partly attributable to a decline in jet fuel prices, said Stephen Brown, deputy chief North America economist at Capital Economics. Average aviation jet fuel prices are down about 17% from last year, according to the International Air Transport Association.
Airlines have also increased the volume of seats available on domestic routes, largely by flying bigger planes, Hayley Berg, lead economist at travel site Hopper, wrote in April.
This summer, “we’ve repeatedly seen airlines slash prices on many routes for travel in the next few months,” wrote Gunnar Olson, flight deal analyst at Thrifty Traveler. “It’s led us to declare that this is the best summer ever for travel.”
Grocery prices have fallen for items such as cereal, rice, bread, ham, fish, cheese, ice cream, potatoes, apples, bananas, margarine and snacks, according to CPI data.
Each grocery item has its own supply-and-demand dynamics that can influence pricing, economists said. For example, apple prices have deflated almost 15% in the past year due to a supply glut.
Additionally, there have been more price promotions lately at grocery stores, with a few “major retailers recently announcing price cuts that are likely to pressure competitors’ pricing,” wrote House and George of Wells Fargo.
Other categories’ deflationary dynamics may be happening only on paper.
For example, in the CPI data, the Bureau of Labor Statistics controls for quality improvements over time. Electronics such as televisions, cellphones and computers continually get better, meaning consumers generally get more for the same amount of money.
That shows up as a price decline in the CPI data.
On our trip to Shanghai auto show facilitated by Zeekr, my colleague Scooter and I got to see an unbelievable amount of EVs from 20+ makers, many of which we’d never heard of. Each maker offered an incredible array of models but one in particular stood out to me: the Lynk & Co 900.
One thing I love about this Plug-in Hybrid is that it has a relatively huge battery and could be ridden fully electric, outside of road trips. The two 45-52kWh battery options provide somewhere between 220 and 280 km of range using China’s optimistic calculator. That’s 137 – 174 miles of EV range before the gas motor kicks in and about six times the average daily commute.
Zeekr, Lynk & Co’s sister company, has an even bigger battery, but gawdier PHEV with a 380km/236 mile range before the gas kicks in. At this point, we are really talking about an EV with a range extender.
As with many Chinese luxury vehicles, the second row seats really stood out. They are as comfortable as a laz-y-boy and offer to electronically spin around 360 degrees to make the 2nd and 3rd row a conference area. I nearly fell asleep in them a few times. OK I did but that’s because of jet lag or something. I can’t get over how futuristic the back of this car is.
Lynk & Co 900 is 524 cm long, 199 cm wide, 181 cm high and has a wheelbase of 316 cm and uses the SPA Evo modular architecture.
The drive is smooth and quick and never once did that petroleum engine kick in.
The 900 comes with standard roof-mounted LiDAR, with higher-priced variants powered by Nvidia’s Thor smart driving chip enabling door-to-door navigation with G-Pilot H7.
Its sleek body isn’t just for looks as it hits the wind tunnel with an impressive drag coefficient of 0.291 Cd. It also boasts a top tier 0-100 km/h in 4.3 seconds.
Lynk & Co is making waves with its upcoming 900 model, which has already received over 40,000 pre-orders ahead of its official launch on April 28. Built on the SPA Evo architecture, the six-seater combines class-leading 88.2% space efficiency with innovative 180-degree rotating second-row seats, targeting premium family buyers seeking versatile cabin configurations. The intelligent cockpit features front and rear 30-inch 6K displays driven by dual Qualcomm 8295 chips, delivering 60 TOPS computing power for eight-screen coordination via the LYNK Flyme Auto system. Powering the SUV is a 2.0T plug-in hybrid (PHEV) powertrain with 3-speed DHT Pro transmission and dual rear motors, generating 650kW total output to achieve 0-100km/h acceleration in 4.3 seconds – positioning the 900 as one of the fastest electrified SUVs in its segment.
It turns out that there are other similar vehicles from other Chinese makers including the Li L9, Denza N9 and Aito M9.
Electrek’s take:
The Lynk & Co 900 is the Chinese EV market in a nutshell: 90% of the car at half the price of its western rivals. Compare to a Range Rover, Rivian R1S, the upcoming Scout, Hyundai Ioniq 7 or a Kia EV9 and it is hard to imagine how well these would sell in the US and Europe.
Something else I love to see is a huge battery PHEV with enough range for reasonable daily tasks before the gas engine kicks in. Scout has a similar idea so we might get to try something similar in the US.
Even in China Lynk&co has noted it had 40,000 pre-orders before launch, so I think this is going to be a popular vehicle. I don’t think, even with the bananas current trade climate, this one will show up in the US. Europe on the other hand might want to keep an eye out however.
FTC: We use income earning auto affiliate links. More.
If you’ve been holding off on going solar, now might be the time to revisit that quote. According to EnergySage’s new Solar & Storage Marketplace Report, prices for both home solar and solar + storage reached record lows in the second half of 2024.
EnergySage, an online solar shopping marketplace (and Electrek affiliate) analyzed millions of quotes from installers across the US in its 20th semiannual report. The data covers January through December 2024 and offers a detailed look at what homeowners pay for solar panels, batteries, inverters, and more.
Home solar and battery storage price quotes hit record lows
The median price for solar-only systems dropped to $2.65 per watt in the second half of 2024, down from $2.80 per watt earlier in the year. That’s the lowest price EnergySage has recorded.
Battery-backed systems saw an even bigger price drop: home solar + storage quotes fell from $2.59 per watt in H1 2024 to $2.40 per watt in H2 2024. Tesla’s Powerwall 3 is playing a big role in the storage price drop. The new version includes an integrated inverter, which shifts some of the cost from the solar quote (measured in $/W) to the storage quote (measured in $/kWh).
These falling prices were driven by a mix of factors. Equipment costs have dropped – Wood Mackenzie reports that residential solar panel prices were down 30% year-over-year. High interest rates and stable electricity prices have softened demand, pushing installers to offer more competitive pricing. And in California, changes to the state’s Net Billing Tariff have also pressured installers to drop prices.
“Heading into 2025, solar and battery prices had never been lower on the EnergySage Marketplace, and for homeowners, that means more affordable and accessible clean energy solutions,” said Emily Walker, director of content and insights at EnergySage. “This creates a compelling record-low benchmark to measure against as we begin to see the effects of shifting policies and tariffs take hold this year.”
Say hello to high-wattage solar panels
Home solar panels are getting more powerful, faster. In H2 2023, 81% of quotes included panels rated under 400 watts. By H2 2024, that number had dropped to just 14%. The shift is thanks to advances in panel efficiency and design: Either the panels themselves are getting bigger, or they’re packing more power into the same space.
High-wattage panels can reduce the number of panels needed per home, saving space and installation time. But there’s a wild card in 2025: tariffs. Bloomberg reported in April that the US had a stockpile of 40-50 gigawatts of solar panels at the end of 2024, which may buffer the US solar industry from big price hikes. However, that could slow down innovation and complicate the supply chain.
“As panel technologies improve, more homeowners are being offered higher-output systems – meaning fewer panels, more power, and a better return on investment,” said Walker. “We’re closely watching how inventory strategies and upcoming tariffs may shape this trend.”
Read more: Tesla Powerwall 3 is disrupting the solar inverter market
To limit power outages and make your home more resilient, consider going solar with a battery storage system. In order to find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and you share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
FTC: We use income earning auto affiliate links. More.
Rivian (RIVN) is already preparing for changes under the Trump administration. In anticipation of Trump’s new auto tariffs, Rivian built a reserve of EV batteries from Asia as a countermeasure.
Rivian has a plan to overcome Trump’s tariffs
At this point, nearly every major automaker has acknowledged the damaging impact of tariffs on vehicle imports in the US.
GM, Volkswagen, Mercedes-Benz, Stellantis, and Volvo all withdrew their financial guidance due to the uncertainty. Rivian wasted no time preparing for the changes.
According to a Bloomberg report on Wednesday, Rivian has been stockpiling lithium-iron phosphate (LFP) battery cells from Gotion High-Tech since last year. The battery cells are used in Rivian’s Commercial Van, initially used by Rivian and now open to other businesses.
Sources familiar with the matter said Rivian covered the upfront costs to stockpile inventory for later use. China’s Gotion paid for and built a separate reserve in the US.
The sources also said that Rivian is working with Samsung SDI to move a significant portion of its battery supply from Korea to the US. Battery cells from Samsung are used in Rivian’s R1S electric SUV and R1T pickup. All three vehicles are built at Rivian’s manufacturing plant in Normal, IL.
The move is to ensure Rivian has enough supply while minimizing potential higher prices and other complications from the tariffs.
As it prepares to launch its smaller, more affordable R2, sources said Rivian is looking to secure similar deals for batteries and raw materials in the future. Rivian has reportedly already signed its first agreement, but no other details were offered.
The upcoming R2 will use cells from LG Energy Solution. Although they will initially come from Korea, LG will produce the next-gen batteries in Arizona.
Electrek’s Take
Although Trump eased some of the impacts on imported vehicles on Wednesday, many tariffs remain in place and are already causing havoc in the industry.
Almost every major automaker has withdrawn earnings guidance due to the expected impacts. Like Rivian, others are taking countermeasures, including boosting US inventory in preparation. However, how long can this last?
Trump claims that the “Golden Age of America” is here, but it looks to be the complete opposite. The tariffs will only put the US further behind as China and others emerge as global leaders in tech.
FTC: We use income earning auto affiliate links. More.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway