Kiplinger's latest forecast on inflation iStockphoto By David Payne, Staff Economist July 12, 2018 GDP Unemployment Interest Rates Inflation Business Spending Energy Housing Retail Sales Trade Deficit GDP 2.9% pace in '18, up from 2.3% in '17 More » Jobs A tight labor market will make hiring more difficult More » Interest rates 10-year T-notes at 3.3% by end '18 More » Inflation 2.4% in '18, up from 2.1% in '17 More » Business spending Up 7% in '18, boosted by expanded tax breaks More » Energy Crude trading from $60 to $65 per barrel in October More » Housing Price growth: 5.0% by end of '18 More » Retail sales Growing 4.9% in '18 (excluding gas and autos) More » Trade deficit Widening 5%-6% in '18 More » The June inflation rate was 2.9%. By the end of this year, it should be just 2.4%. June’s large number measuring price change from a year ago includes last fall’s surging gasoline prices. By this December, 2017’s jump will get excluded from the yearly growth rate, bringing the headline number down. Other twelve-month inflation rates will change little between now and December: Shelter costs will stay at today’s 3.4% rate, food will stay at 1.4%, all other commodities will edge up to about 0% from -0.2% now. Medical services will pick up to 2.8% from 2.5% currently, and all other services will see a small rise to 2.8%. via e-mail: Kiplinger Alerts — Intelligence for your business success Monthly, prices rose a modest 0.1% in June. Price drops for electricity and natural gas dampened the overall index, but likely only temporarily. Housing costs also rose less than normal in June, but again, likely only for a short time. Advertisement Ignoring volatile energy prices, the overall inflation rate will gradually head up, as is consistent with stronger economic growth. The Federal Reserve will take this as justification for its program of steadily hiking interest rates, though the bank is not likely to shorten the interval between hikes, which happen quarterly. The next quarter-point hike is expected in September. SEE ALSO: Print-Ready Consumer Price Index Chart Source: Department of Labor, Inflation Data