Inflation backs away from retail, offers refuge for shoppers as many goods see price declines

For cost-conscious shoppers, retail may offer a refuge from inflation.

The latest Consumer Price Index (CPI) showed prices rose 3.2% YoY in July, up from 3% in June. That marks a slight reversal of the cooling trend of recent months. It was largely driven by a 0.4% jump in the cost of shelter—though many consumer goods prices actually fell.

Run your eyes down the June to July column for month over month inflation, and you’ll notice that most physical goods except food and energy are tagged with minus signs. This has been the general trend for the last three months, but an increasing number of categories are now more affordable.

• Toys fell 2.9%
• Smartphones fell 1.6%
• Video and audio products fell 1.3%
• Footwear prices fell 0.8%
• Tools, hardware, outdoor equipment and supplies fell 0.7%
• Household furnishings and supplies fell 0.4%
• Pets and pet products fell 0.4%

The data comes amid a heavy promotional environment for retailers looking to pump up demand and keep inventory moving.

Some exceptions: Inflation in apparel continued to cool but didn’t break negative, posting a nice round 0.0% for July, although prices for men’s, women’s and girls’ apparel bucked the trend and went up 0.2%. Still, this is a far cry from the across the board price hikes of 2022, when supply chain issues led to widespread shortages at retailers.