Here's the deflation breakdown for June 2024 — in one chart
What factors contributed to the fall in gasoline prices?
The fall in gasoline prices can be attributed to several factors, including declining demand, strong supply, relatively mild oil prices worldwide, and lackluster consumer behavior. Additionally, decreasing gasoline demand, increased U.S. refinery utilization, and lower crude oil prices have also contributed to the drop in prices.
What is deflation and how does it affect consumer goods?
Deflation refers to a decline in the general price level of goods and services over a period of time, effectively increasing consumer purchasing power6. Since June 2023, deflation has been observed in various consumer goods such as physical goods, airfare, gasoline, and some groceries, primarily due to normalized supply and demand dynamics post-COVID-19 pandemic. However, a broad and sustained fall in prices across the economy, indicative of a recession, is not expected.
Why have prices for physical goods deflated since June 2023?
Prices for physical goods have deflated since June 2023 due to a combination of factors, including normalized supply and demand dynamics, reduced consumer demand for pandemic-driven purchases, resolved supply chain issues, and a strong U.S. dollar making imports less expensive.