[UNITED STATES] Although inflation remains above the Federal Reserve’s 2% target, recent data shows that prices in certain parts of the U.S. economy have begun to retreat, offering consumers modest relief.
According to the latest Consumer Price Index (CPI) figures, prices have declined in categories such as airfare, gasoline, electronics, household goods, and fresh produce. While overall inflation continues to be a challenge, these isolated instances of deflation (a drop in prices) provide a brief reprieve for households contending with rising costs in areas like housing and healthcare.
Despite this, economists stress that these selective declines are unlikely to signal a broader easing of inflation. Service prices—which represent a substantial share of consumer spending—continue to climb steadily.
“There are a lot of idiosyncratic factors affecting certain categories,” said Ryan Sweet, chief U.S. economist at Oxford Economics. “In the end, it’s supply and demand that will affect prices.”
Many of the categories seeing lower prices are historically volatile and subject to rapid swings. Additionally, geopolitical risks and tariff policies could reintroduce upward pressure across the board.
The current contrast between falling goods prices and rising service costs underscores the uneven pace of post-pandemic recovery. While supply chain improvements have helped bring down prices for many physical products, persistent labor shortages are driving service-sector inflation.
“Consumers should enjoy these lower prices, because they’re not here to stay,” said Mark Zandi, chief economist at Moody’s Analytics. “They’re going away pretty quickly, I think, over the next few weeks and months.”
Here’s a closer look at some categories where consumers have recently seen price relief:
Gasoline
Despite misleading claims circulating online, average U.S. gasoline prices remain well above $1.98 per gallon. As of the latest data from the U.S. Energy Information Administration, prices are hovering above $3 per gallon. Still, gas prices have dropped nearly 10% compared to a year ago, with a 6% decline just from February to March on a seasonally adjusted basis.
This drop is timely for motorists as the summer travel season approaches. Analysts attribute the decline to rising U.S. production and softer global demand, though ongoing geopolitical tensions could quickly reverse these gains.
Crude oil futures, particularly for West Texas Intermediate, have plunged 22% over the past year. These lower oil prices are raising concerns about a potential economic slowdown, which would suppress demand further. Meanwhile, a weekend decision by OPEC+ to increase output has also added downward pressure on prices.
“Prices can’t go much lower for very long or [oil] producers will start pulling back production,” Zandi warned.
Airline Fares
Lower oil prices have also led to cheaper airline tickets, which are down more than 5% year-over-year and fell 5.3% from February to March, according to CPI data.
This drop comes as competition among carriers intensifies and travel habits shift, with more consumers turning to budget airlines or other transportation options. A stronger U.S. dollar has made international travel more accessible to Americans, though it’s discouraged some inbound tourism.
Jet fuel, a major cost for airlines, has seen a 15% decline in the year through late April, according to the International Air Transport Association. Sluggish international travel demand, influenced by U.S. geopolitical actions and trade tensions, has further depressed fares. For instance, international visits to the U.S. were down 14% in March 2025 compared to the previous year.
Economists say potential travelers remain wary due to controversial White House declarations—such as talk of making Canada the 51st state or exploring sovereignty over Greenland—as well as concerns over detainment risks at U.S. borders.
Produce
Fresh produce, including tomatoes, lettuce, and potatoes, has also become more affordable. CPI data shows tomato prices fell 8% in the past year, while lettuce and potato prices dropped by 5% and 2%, respectively.
Lower diesel prices, which reduce transportation costs, have helped ease produce prices, along with the return of more stable agricultural supply chains. However, economists caution that extreme weather or new tariffs could reverse this trend.
“Tomato supplies are increasing as the Florida harvest is well underway,” said Brad Rubin of the Wells Fargo Agri-Food Institute. Rubin also cited a robust spring harvest in Culiacan, Mexico, including a variety of tomato types.
Still, new tariffs on Mexican tomato imports, set to begin in mid-July following a trade agreement withdrawal by the Trump administration, may drive prices up again. Meanwhile, the spring lettuce harvest in Salinas, California, is yielding high volumes, easing pressure after winter production issues in Arizona.
Electronics and Other Goods
Consumer electronics have also seen notable price drops. TV prices are down 9% and smartphones 14% over the past year, according to CPI data. These products also fell slightly from February to March.
Such deflation in electronics is not unusual. “The flat screen TV you may have bought five years ago is a lot cheaper if you go out today,” said Sweet. “That’s normal.” Continuous innovation in technology allows companies to offer more value at lower prices, a dynamic the CPI captures as a price decrease due to quality improvements.
Other categories showing declines include dishes and flatware (down 11%), sporting goods (down 5%), toys (down 2%), and certain clothing items like infant apparel (down 4%).
These drops may be tied to seasonal shifts or inventory adjustments. Retailers, anticipating tariffs, may have overstocked some products and are now cutting prices to reduce inventory, Zandi suggested.
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