Please enable JavaScript to view the comments powered by Disqus.

Economic Forecasts

No Increase in Inflation for 2019

Kiplinger's latest forecast on inflation

iStockphoto

GDP Third-quarter growth a solid 3.5%, but slowdown is coming More »
Jobs Unemployment rate will decline further in '19 More »
Interest rates 10-year T-notes at 3.6% by end ’19 More »
Inflation 2.3% in ’19, the same as in ’18 More »
Business spending Up 7% in ’18, boosted by expanded tax breaks More »
Energy Crude trading from $65 to $70 per barrel in March More »
Housing 5.46 million existing-home sales in '18, down 1.5% More »
Retail sales Growing at least 4% in ’19 (excluding gas and autos) More »
Trade deficit Widening 7%-8% in ’19 More »

The inflation rate in 2019 will end the year at 2.3%, the same as in 2018. Factors pushing prices up faster include tariffs and rising labor costs. Pushing inflation down will be the strength of the U.S. dollar, low gasoline prices and an expected deceleration of housing costs. The end result will be a wash, with up and down factors in balance.

The moderate inflation rate will mean the Federal Reserve doesn’t have to speed up or slow down its interest rate hikes. It will continue raising rates at its present measured pace of a quarter of a point every three months through September of next year.

A bump up in energy prices pushed the October inflation rate to 2.5%. Those gains should partially reverse themselves soon. The “core” rate — all prices except food and energy — nudged down to 2.1% in October. The rate will likely edge up to 2.2% by the end of the year, and 2.3% by the end of 2019.

Advertisement

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

Shelter costs will end 2018 up 3.1% and are expected to rise at a slightly slower pace in 2019. Food gains will run a slightly slower 1.0% next year. Prices of all other commodities will decline slightly this year and next. And growth in the cost of medical care services will build to 2.4% next year, from 2.0% now. Cost increases for physicians’ services and prescription drugs have been lower than expected for a while but should start gaining. Other services will see a rise to 3.2% in 2019, from 2018’s 2.9% rate.

SEE ALSO: Print-Ready Consumer Price Index Chart

Source: Department of Labor, Inflation Data