Inflation is slowing — really. Here's why Americans aren't feeling it.

Many Americans remain dour on the state of the economy, with the price of necessities like food and rent a lingering source of pain. Although it may seem like small consolation for cash-strapped consumers, economists have some good news. Really. 

Forecasters predict that the steep drop in inflation since it peaked at more than 9% in June of 2022 will continue in 2024. David Kelly, JPMorgan Asset Management's chief global strategist, projects "a very steady decline in inflation throughout the next year." That could lead the Federal Reserve to cut its benchmark interest rate and push down borrowing costs for individuals and businesses.

Moderating inflation can be seen in recent government data, with the Consumer Price Index in September up 3.7% over the prior 12 months.

"This is not a one or two-month story — the economy is cooling, and that will put further downward pressure on prices," Gregory Daco, chief economist at EY-Parthenon, Ernst & Young, told CBS MoneyWatch.

To be sure, consumers don't experience the economy as annualized rates of change in prices. A gallon of gas or milk either costs more than it did a year go or less. With prices for some essential goods still significantly higher than when inflation began surging in early 2020, it may be no surprise that half of the respondents to a Bankrate survey this week described their financial situation as worsening since the last presidential election in 2020. 

Worries about high prices also had one gauge of U.S. consumer confidence sinking to a five-month low in October, data released at the end of the month by the Conference Board showed. 

"Consumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular," Dana Peterson, chief economist at the Conference Board, said in a statement. "Consumers also expressed concerns about the political situation and higher interest rates."

Recession fears fade

One abiding concern for consumers from earlier this year has faded, by contrast: recession.

"We've been saying [interest] rates are at a peak and a soft landing is the most likely outcome," Rubeela Farooqi, chief U.S. economist, High Frequency Economics, told CBS MoneyWatch, noting that Americans continue to spend despite their bleaks economic views. "We are not heading into a recession 2024."

Another closely watched inflation gauge — the government's Personal Consumption Expenditures Price Index, which reflects monthly changes in the price of goods and services — also shows that inflation is cooling, albeit not fast enough for Americans.

PCE inflation stood at 3.4% in September, the same pace as in July and August, analysts at PNC Financial Services Group said in a report. That's down from a peak of 5.6% in early 2022.

"Inflation is slowing, but only gradually, and it remains far above the Federal Reserve's 2% objective," PNC analysts wrote. "Inflation should continue to decline in the near term as the labor market softens somewhat and wage pressures abate. Slower rent growth will also contribute to a softening in housing inflation into 2024."