Michelle ThompsonFrom an economic perspective, 2024 showed notable improvement in managing inflation.
While the price of eggs might disagree, overall costs for everyday goods and services rose just 2.5% from January to November, according to Bureau of Labor Statistics data. This marks a decline from 3.1% in 2023 and 6.4% in both 2022 and 2021 over the same period.
Although inflation is slowing and wages are outpacing price increases, the lingering effects of recent high inflation continue to impact households and finances.
Amid challenges, it’s worth acknowledging some positive price trends from the past year, exploring their causes, and looking ahead to 2025.
Here are key categories that saw price drops in 2024, based on Consumer Price Index data through November.
Fuel Oil (home heating oil)
2024 Price Change (through November): Down 16.8%
Energy costs remain a mixed bag, but 2024 brought some relief with a significant drop in residential heating oil prices, driven by lower crude oil costs. This nearly 17% decline compared to last year offers some respite to the 4% of U.S. households—primarily in the Northeast and Alaska—that rely on heating oil.
However, the drop is relative. Prices are falling from record highs set in November 2022, according to the U.S. Energy Information Administration. Moreover, they remain 27% higher than pre-pandemic levels, highlighting the complex reality of energy affordability.
Oil delivery trucks parked at Jacobi Oil Service Inc. in Floyds Knobs, Indiana, October 20, 2021.
The cost consumers pay for heating oil depends on multiple factors, including weather, energy efficiency, and usage, according to Mark Wolfe, executive director of the National Energy Assistance Directors Association (NEADA).
Despite a 16.8% drop in heating oil prices this year, related expenditures are projected to decline just 2.7% this winter, NEADA forecasts. Meanwhile, propane and electricity users may see costs rise by 4.4% and 14.2%, respectively.
2025 Outlook:
High heating bills follow a summer of soaring cooling costs, which have pushed utility debt to record levels, Wolfe noted. With growing energy burdens fueled by extreme weather and increased demand—such as grid upgrades driven by AI data centers—this trend is unlikely to reverse soon.
Public energy assistance funding remains stagnant, adding pressure to households. “There’s growing resistance to prices, but with utilities, there’s little consumers can do,” Wolfe emphasized.
Gasoline
2024 Price Change (through November): Down 7.6% (Gasoline, All Types)
Gasoline prices, though notoriously volatile, serve as a visible barometer of economic trends. In 2024, Americans experienced some relief at the pump.
U.S. oil prices have stabilized above $70 per barrel, significantly lower than the 2022 spike above $120 per barrel following Russia’s invasion of Ukraine. This decline comes despite persistent tensions in the Middle East and the prolonged conflict between Russia and Ukraine.
A customer refuels at a gas station in Hercules, California, on November 27, 2024.
Weaker global demand, particularly from countries like China, coupled with strong supply, has contributed to a drop in crude prices. A significant factor in this trend is the U.S., which is now producing more oil than any other country in history.
Will prices continue to fall?
GasBuddy experts believe they will. The fuel price tracking firm, known for its accurate forecasts, told CNN that gas prices should continue to decrease into 2025. GasBuddy predicts the national average will drop to $3.22 per gallon in 2025, down from $3.33 this year.
However, gas prices remain highly volatile, and geopolitical risks continue to pose uncertainties, as noted by Lauren Saidel-Baker, an economist at ITR Economics. “Non-fundamental economic factors could significantly impact gas prices going forward,” she said.
Consumer Technology
2024 Price Change (through November): Down 6.7%
Technology has historically been a deflationary sector, according to Rick Kowalski, senior director at the Consumer Technology Association. Several factors contribute to this, including Moore’s Law, which drives greater efficiency in semiconductors and chips, economies of scale, and the competitive nature of the tech industry.
Even during the pandemic, when inflation surged across most sectors, consumer tech prices remained relatively below core inflation, Kowalski noted. According to Bureau of Labor Statistics data, the information technology commodities index has dropped more than 26% since February 2020.
Could this change in 2025?
Tech device prices are expected to continue rising slower than core inflation, but tariffs could disrupt this trend. Kowalski warned that proposed tariffs under President-elect Donald Trump could significantly raise prices for many tech products.
A recent CTA study found that, if tariffs are fully passed onto consumers, the price of a TV could increase by 9% ($48), smartphones by 25.8% ($213), and laptops by 45% ($357). “Tariffs are a tax on consumers and businesses, disrupting supply chains and stalling innovation,” Kowalski explained.
Used and Rental Cars
2024 Price Changes (through November):
- Car rental prices down 6.7%
- Used car prices down 4.6%
The pandemic disrupted supply chains, leading to significant price increases across many sectors, including the auto industry. A global shortage of computer chips severely limited the production of new vehicles, causing demand and prices for used cars to skyrocket, with some price hikes exceeding 45%, according to CPI data.
As supply chains have gradually recovered, used car prices have dropped throughout 2023 and continued to decline in 2024. Car rental prices have also seen a decrease, reflecting broader changes in the industry.
A pedestrian walks past a used car lot in Glendale, California, on February 15, 2023.
The decline in used car prices has been more pronounced in the rental market, which experienced a nearly 110% surge in its annual inflation rate in May 2021.
2025 Outlook:
Although used car prices are no longer falling as sharply, the overall outlook for vehicle prices remains uncertain. High interest rates continue to be a significant barrier to purchases, but they have also helped prevent further price hikes, according to Gus Faucher, chief economist at PNC Financial Services Group. “And so that’s how inflation slows,” he explained.
However, economists warn that tariffs could disrupt the U.S. auto industry. The complexity of replacing car parts from American suppliers would make manufacturing vehicles in U.S. plants more expensive, potentially driving up prices.
General Goods (apparel, toys)
2024 Price Declines:
- Men’s suits down 5.2%
- Women’s dresses and outerwear down 3.7%
- Toys down 3.1%
In 2024, inflation has been primarily driven by services, such as housing, rents, education, and health care. On the other hand, prices for goods have continued to fall from their pandemic peaks. Notable declines were seen in categories like clothing, toys, and some furniture items, including products like sewing machines.
An Anthropologie store in the Soho neighborhood of New York on August 14, 2024.
“We were stuck at home, so we ordered a lot of stuff online, a lot of physical goods,” Faucher noted, explaining that Americans increased their goods purchases by 15% during the pandemic.
The supply chain wasn’t prepared to handle that surge, which led to higher prices. As demand has leveled off in recent years—people returning to in-person activities, supply chains stabilizing, and consumers no longer needing excess items like sewing machines, couches, and stationary bikes—prices have either remained flat or even dropped.
Will this continue?
All else being equal, goods prices are expected to stay relatively flat heading into 2025. However, tariffs on the U.S.’s major trading partners could disrupt this.
“A lot of the goods we buy are imported, and even domestically produced goods rely on foreign inputs,” Faucher explained. “If tariffs are imposed, it would raise goods prices, at least temporarily, leading to higher goods inflation and overall inflation.”
Food
2024 Price Declines (through November):
- Frozen baked goods down 3.3%
- Crackers down 2.4%
- Canned vegetables down 2.2%
Despite what your morning omelet might suggest, food prices have been relatively stable in 2024, with some categories even experiencing price drops.
Frozen foods, canned goods, and packaged items like crackers and cereal saw declines. These reductions can be attributed to factors such as shifting consumer demand—more people dining out or opting for less processed food—as well as weather and harvest conditions.
A customer shops in the frozen foods aisle of a grocery store in Miami on October 17, 2024.
Food prices are highly volatile, influenced by factors such as weather events, crop yields, disease, war, supply chain disruptions, and spikes in demand. This volatility has been particularly evident in recent months with sharp price increases in products like eggs, meat, coffee, orange juice, and dairy.
2025 Outlook:
Overall, food prices are expected to continue experiencing disinflation, based on projections from the U.S. Department of Agriculture’s Economic Research Service. However, certain areas of the food industry, facing shortages due to disease or weather conditions, could see persistent price hikes.
Economists also caution that food price volatility may increase due to more extreme weather events and worsening geopolitical issues. Additionally, policies such as tariffs, mass deportations, or restrictions on immigration could negatively impact food prices.
