(WKBN) – Inflation is cooling. In the U.S. over the past year, it has tumbled from 9% to 3%, according to the Associated Press.

It’s a relief after pricing in the grocery store and just about everywhere else has challenged consumers. But when inflation cools, that just means that prices are not escalating at a rapid rate. It does not mean that prices are coming down.

In addition, some say the hardest part is just ahead. The Federal Reserve is hoping for what’s called a “soft landing” in the coming months. A scenario in which it manages to slow inflation down to its target level through higher interest rates without derailing the economy.

The Fed is hoping for inflation to sink in the 2% range. When that happens, interest rates should come down but not necessarily prices.

According to the Biden Administration, there are three ways households experience relief from high inflation: disinflation (slower inflation), deflation (falling prices), and real wage gains. Biden says all three are at play in the current economy but deflation is the least of them.

Deflation is what most consumers are interested in. Are prices going to come down to pre-pandemic levels? It’s not likely anytime soon, if ever. Deflation across many different goods and services is a rare phenomenon in advanced economies, and it is usually a sign of dangerously weak growth, according to an update from the Biden Administration.

Higher wages are what’s needed then to alleviate price hikes to give consumers more buying power. Wages have made some marginal gains, but it’s been slow. Real wage growth has increased above prepandemic levels but so have prices for goods. Wage growth has steadily risen since 2006, with a big dip in 2008 and a spike in 2020 before taking another significant dip in 2022. It is inching up again, but slowly.

Biden has said that policymakers have work to do. Even while wages have increased, the buying power is not what it was pre-pandemic. He said deflation is not needed to give Americans buying power but that higher wages are the answer along with cooling inflation and more competition.