Forget the Weather. Here’s the Forecast You Really Need to Know

Photo (cc) by KOMUnews

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.

Nothing but good news when it comes to oil

One of the few areas that has recently experienced deflation – falling prices – is oil. Thanks to a combination of global factors and domestic production, we’ve been able to fill up our tanks at prices we haven’t seen since 2009.

In 2015, the price at the pump may increase from recent lows, but the good news should continue through the new year. As of this writing, the U.S. Energy Information Administration is predicting WTI crude oil will cost $62.75 a barrel in 2015, which could result in gasoline selling for a nationwide average of $2.60 a gallon.

There’s also good news if you use heating oil to warm your house. The administration estimates the price should drop from an average of $3.70 a gallon in 2014 to $2.96 a gallon in 2015.

College degrees will cost more in 2015

If you or your child is hitting the books in pursuit of a degree, expect to see a larger tuition bill this year.

According to the College Board, for-profit institutions will have the smallest average tuition increases, while students at private nonprofits will experience the most sticker shock. Here’s the breakdown of the average increases for the 2015-2016 school year:

  • For-profit schools — 1.3 percent.
  • Public four-year schools (in-state tuition) — 2.9 percent.
  • Public four-year schools (out-of-state tuition) — 3.3 percent.
  • Public two-year schools (in-district tuition) — 3.3 percent.
  • Private, nonprofit four-year schools — 3.7 percent.

Room and board charges will also be going up an average of 2.2 to 3.4 percent, depending on the type of institution.

Get ready for higher health care costs

Each year, PwC (formerly known as PricewaterhouseCoopers) projects a medical cost trend for the year. In 2015, it says that trend will be 6.8 percent.

The medical cost trend represents the overall growth of the health sector, and it could mean you’ll see the price of your medications and medical services increase.

While the medical cost trend anticipates higher health care expenses for the year, it doesn’t necessarily mean your health insurance premiums will be rising 6.8 percent. To get a better idea of what’s happening to premiums prices, PwC reviewed state data for individual health insurance plans.

As of November 2014, more than a dozen states had made final rate approvals for plans being offered to their residents for 2015. Among those states, the average increase in premium prices is 3.7 percent. Meanwhile, when all other states were added to the mix, the average increase jumped to 5.4 percent.

While those increases aren’t too bad overall, price changes vary significantly by state, which means not everyone is getting off easy. Pity the poor Alaskans, who are experiencing an average 32 percent increase in their premiums this year.

As a whole, the 2015 inflation forecast is positive for consumers. While the nation’s economic growth has been slow until recently, the silver lining is steady prices on most of what you buy.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
8 Secrets of an Expert Thrift Store Shopper
8 Secrets of an Expert Thrift Store Shopper

Here’s how a veteran thrift shopper scores the best deals — and turns a profit from them.

26 Things Everyone Should Keep in Their Car
26 Things Everyone Should Keep in Their Car

These tools and conveniences help protect drivers from hassles and calamities on the road.

How Baby Boomers Are Earning an Extra $573 a Month
How Baby Boomers Are Earning an Extra $573 a Month

In the gig economy, baby boomers are out-hustling their younger competition. You can cash in, too.

Don’t Toss These 7 Household Items — Sell Them
Don’t Toss These 7 Household Items — Sell Them

Here’s how to earn cash as you give new life to these unwanted items.

5 Reasons You Should Work for as Long as You Live
5 Reasons You Should Work for as Long as You Live

These benefits might make you think twice about retirement.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

9 Deep Discounts Available on Amazon This Friday
9 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.