Generally speaking, no, overall prices in stores are not lower than they were a year ago. Instead, they are typically higher, but they are rising at a much slower pace than they were during the peak inflation years of 2021–2023.
To understand what is happening in stores, it helps to look at the difference between disinflation (which is what most economies have been experiencing) and deflation (which is rare).
1. Disinflation vs. Deflation
•Disinflation (Prices are rising more slowly): When you hear news that "inflation is coming down," it does not mean prices are dropping. It means prices are still going up, just not as fast as before. For example, if grocery inflation drops from 8% to 2%, your grocery bill is still 2% higher than it was last year—it just didn't jump by 8% again.
•Deflation (Prices are actually falling): This is when the average price of goods and services actually decreases compared to the previous year. Central banks generally try to avoid widespread deflation because it can signal a severe economic downturn (as consumers delay purchases waiting for lower prices, which can trigger layoffs and recessions).
2. What has actually gotten cheaper?
While the overall "basket of goods" (tracked by metrics like the Consumer Price Index, or CPI) is more expensive than a year ago, certain specific categories and items have seen price drops:
•Selected Groceries & Retail Goods: Throughout 2024, major retailers (including Walmart, Target, Walgreens, and Aldi) announced price cuts on thousands of everyday items—such as milk, bread, diapers, and toilet paper—in an effort to lure back budget-conscious shoppers.
•Appliances and Electronics: Prices for large household appliances, televisions, and computers have generally trended downward or stabilized.
•Used Cars and Trucks: After skyrocketing during the pandemic due to supply chain shortages, used vehicle prices have steadily declined year-over-year.
•Gasoline and Energy: Gas prices fluctuate wildly based on global oil markets, but there have been several periods over the last year where gas prices were lower than the same time a year prior.
3. What is still getting more expensive?
The areas keeping overall prices higher than last year include:
•Services: Things like car insurance, home insurance, medical care, and dry cleaning have continued to rise sharply.
•Dining Out: Restaurants and fast-food chains have kept raising prices to cover higher labor and rent costs, even as grocery store price increases have slowed down.
•Housing and Rent: Shelter costs remain one of the stickiest drivers of inflation.
How to check current data
Because economic data is updated monthly, the exact trend depends on when you are reading this. If you want to see the exact percentage changes for this month compared to the same month last year:
•In the US: Check the latest Consumer Price Index (CPI) summary published monthly by the Bureau of Labor Statistics (BLS). They break down exactly which categories (like meats, dairy, apparel, or gasoline) went up or down.
•In the UK/Europe: Check the Office for National Statistics (ONS) or Eurostat.