Consumers Push Back on Prices While Companies Pull Back on Hikes, Signaling Hope for Lower Inflation

Consumers are pushing back against high prices by shifting to cheaper store brands, shopping at discount retailers, and buying fewer discretionary items.

In response, large food companies have sharply slowed their price increases after raising prices aggressively in 2021 and 2022.

Economists say consumer resistance means high inflation likely won't persist like the debilitating price spikes of the 1970s and 80s.

Companies like PepsiCo, Kimberly-Clark, and McDonald's are now focused on limiting price hikes and boosting sales volumes.

Federal Reserve officials cite increased consumer price sensitivity as a key reason they expect inflation to continue falling.