Please enable JavaScript to view the comments powered by Disqus.

Economic Forecasts

Expect Stable Core Inflation through 2019

Kiplinger's latest forecast on inflation

iStockphoto

GDP 2018 growth is 2.9%; 2.5% for 2019 More »
Jobs Job gains will be around 180,000 per month in 2019 More »
Interest rates 10-year T-notes at 2.8% by end ’19 More »
Inflation 2.2% in ’19, up from 1.9% in ’18 More »
Business spending Up 5% in ’19 as global growth slows More »
Energy Crude trading from $60 to $65 per barrel in August More »
Housing 5.35 million existing-home sales in ’19, up 0.2% More »
Retail sales Growing 4% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

Inflation is stable, about 2.1% for the core rate, which is everything except food and energy. Energy prices have picked up this year, driving 2019’s overall inflation rate to 2.2%, from 1.9% in 2018.

Overall prices rose 0.4% in March because of a jump in gasoline prices. However, this only partially reverses the huge gasoline price decline between November and January. Gas prices are about what they were for most of 2018 and should remain roughly the same for the next few months.

Shelter costs will end 2019 3.2% higher, up slightly from 3.1% in 2018. Food prices have bumped up 2.1% — their fastest pace in four years — and could rise higher if trade tensions with China are resolved and exports surge. All other commodities will see their prices go up a bit: The cost of medical services will jump 2.7%, about the same as last year. Inflation for physicians’ services and prescription drugs has been lower than expected for a while. Hospital visits will keep getting more expensive faster than other goods and services. Other services will be 1.6% more expensive in 2019, down from 2018’s 2.4% increase.

Advertisement

via e-mail: Kiplinger Alerts — Intelligence for your business success

The Federal Reserve won’t have to worry about inflation this year but will closely track the effect of higher wages. It’s more likely to raise interest rates further if businesses pass on to customers their wage-hike costs, especially in the service sector.

SEE ALSO: Print-Ready Consumer Price Index Chart

Source: Department of Labor, Inflation Data