U.S. Inflation & Price Pressures Report: December 2023

December 2023

Report summary

Following a reprieve from price growth in October, more U.S. adults experienced higher-than-expected prices on purchases last month. Prices continue to impact purchasing decisions this holiday season: Consumers showed higher price sensitivity on discretionary purchases compared with a year ago and continued trading down for high-priced essentials. Plentiful supply and modest demand growth for categories like durables could help cool prices further, but factors like still-elevated housing costs suggest the inflation trajectory may be bumpy.

Key Takeaways

  • Slowing inflation, along with ample supply for most goods, is helping to support consumer purchases ahead of the holidays, but consumers remain highly price-conscious.
  • Trading down is less of a factor for most goods and services than it was a year ago as more retailers promote discounts. However, consumers’ willingness to seek out cheaper alternatives and their strategies for doing so vary by category.
  • Inflation expectations have fallen this year as price growth has slowed, but they have recently begun to level off as prices in major categories like food and housing remain stubbornly elevated.

About the authors

A headshot photograph of Kayla Bruun
Kayla Bruun
Senior Economist

Kayla Bruun is a senior economist at decision intelligence company Morning Consult, where she analyzes consumer spending, inflation and household finance trends, leveraging the company’s proprietary high-frequency data.

Prior to joining Morning Consult, Kayla was a key member of the corporate strategy team at telecommunications company SES, where she produced market intelligence and industry analysis of mobility markets. 

Kayla also served as an economist at IHS Markit, where she covered global services industries, provided price forecasts, produced written analyses and served as a subject-matter expert on client-facing consulting projects. 

Kayla earned a bachelor’s degree in economics from Emory University and an MBA with a certificate in nonmarket strategy from Georgetown University’s McDonough School of Business.

Follow her on Twitter @KaylaBruun. For speaking opportunities and booking requests, please email [email protected]

A headshot photograph of Sofia Baig
Sofia Baig

Sofia Baig is an economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency data. Previously, she worked for the Federal Reserve Board as a quantitative analyst, focusing on topics related to monetary policy and bank stress testing. She received a bachelor’s degree in economics from Pomona College and a master’s degree in mathematics and statistics from Georgetown University.

Follow her on Twitter @_SofiaBaig_For speaking opportunities and booking requests, please email [email protected]