Onward and upward might be a cliché, but it seems to accurately describe the price of just about everything. Here’s what the inflation forecast looks like for 2015.
There’s a reason you could buy a car at the turn of the century for about $700, but a new one today will set you back, on average, somewhere north of $32,000. And no, you can’t blame it all on technology or materials or the cost of labor, although all of those do a play a role in rising prices.
Instead, the major factor in the increasing price of cars (and everything else for that matter) can be summed up in one word: inflation. It’s a complex economic concept, but inflation basically means that, over time, prices go up and money’s purchasing power goes down.
How much more will inflation cost you in 2015? Money Talks News finance expert Stacy Johnson has a breakdown in the video below. Watch what Stacy has to say, and then keep scrolling to see the numbers in black and white.
There isn’t much good about recessions, but they do often keep inflation rates low. The Great Recession has been no exception, with the overall inflation rate remaining relatively flat in recent years.
In December, the Federal Reserve downgraded its inflation forecast for 2015 and is predicting that overall inflation will fall somewhere between a mere 1 to 1.6 percent for the year. Originally, the Fed had said it thought inflation would be between 1.6 and 1.9 percent in 2015.
Food prices will go a little higher
While the Federal Reserve’s inflation prediction can provide a good barometer for the overall state of the economy, not every sector grows at the same rate.
For example, food is one area expected to see price increases higher than the overall inflation rate. The Economic Research Service in the U.S. Department of Agriculture calculates an annual food price inflation, and it estimates supermarket food prices will rise 2 to 3 percent in 2015.
However, some categories of food may see prices rise more than others during the coming year.
- Pork, beef and veal — 4.5 to 5.5 percent.
- Poultry, fresh fruits and dairy products — 2.5 to 3.5 percent.
- Fresh vegetables — 2 to 3 percent.
- Sugar and sweets — 1.5 to 2.5 percent.
- Eggs — 1 to 2 percent.
- Cereal and bakery products — 0.5 to 1.5 percent.