Consumers will not see signs of inflation this year as the prices of food and energy have remained relatively stable despite intermittent volatility.

“To borrow from a commonly cited quotation, reports of the death of stable prices have been greatly exaggerated,” said Mark Hamrick, senior economic analyst and Washington bureau chief of Bankrate, the North Palm Beach, Fla.-based financial content company. “We’ve been hearing for years now since the financial crisis that we’re on the verge of an outbreak of aggressive inflation. It hasn’t happened.”

Despite a lackluster economy with anemic growth, especially among wages, an imminent surge of inflation is not expected.

“There’s nothing on the horizon to suggest it will occur in the near term,” he said. “We have seen rebounds in the prices of crude oil and gasoline, serving as reminders of their volatility.”

Headline inflation, which includes prices for energy and food, is always volatile and indicative of what the consumer “is feeling at any one point in time,” said Derrick Handwerk, a managing partner of Handwerk Multi Family Office in Lansdale, Pa.

Inflation should not always be viewed negatively, because it demonstrates that the economy is growing and not weak, he said.

“If gas prices go up, because the Federal Reserve does not raise rates for a while and the dollar eases, then energy prices could rise,” Handwerk said. “The Fed can easily reduce inflation by raising interest rates which would reduce economic growth as Paul Volker did in the 1980s.”

The key drivers of inflation, which include rising consumer spending and wages, are not occurring, said Alan MacEachin, a corporate economist for Navy Federal Credit Union in Vienna, Va.

“Consumers should not be concerned generally about inflation at this time,” he said. “While the unemployment rate is now below 5%, there still appears to be some remaining slack in the labor pool as the share of long-term unemployed as a percent of total unemployed remains historically high.”

Effect on Consumer Budgets

The Fed’s dovish comments in March have indicated that the central bank will likely slow down their “dot plot,” implying that the Fed will likely seek two interest rate hikes this year, down from their original four increases. The U.S. could remain in a lower rate environment “longer than people think,” said Timothy Davis, a vice president at HudsonPoint Capital in Edison, N.J.

While this strategy does not bode well for savers, consumers will receive an extended reprieve on lower interest rates, giving them the opportunity to pay down credit card debt and refinance mortgages.

“We do not see rising inflation this year due to low commodity prices and lack of consumer demand,” he said. “When consumers spend more, they often save less. The silver lining is that low rates help lower debt through the refinancing of consumer loans and mortgages and can encourage home buying.”

The one area that should be a concern is increasing rent and home prices, said MacEachin.

“This trend is essentially a regressive tax on lower income households as it leaves them less and less disposable income,” he said.

Fed Chair Janet Yellen and the central bankers have indicated that they believe inflation will remain low and economists are largely predicting inflation will remain around 2%, a number that “most consumers would not even notice,” said Mike Davis, a senior lecturer at Southern Methodist University’s Cox School of Business in Dallas.

Besides the standard increase of oil prices, consumers will not be “hit hard by the rates of inflation we’re likely to see,” he said.

The current lackluster economy means that consumers do not have to cope with any pressure points for prices, said Coleen Pantalone, a finance professor at the D’Amore McKim School of Business at Northeastern University in Boston.

“Deflation and negative interest rates are a bigger concern for policy makers,” she said.

Why Inflation Remains a Concern

Of course, inflation is a “definite threat” during the next 24 months, said Edison Byzyka, chief Investment officer of Hefty Wealth Partners in Auburn, Ind.

“It’s unrealistic to assume that commodities, such as oil, will remain at these levels for much longer,” he said. “The eventual outcome in the future, assuming oil increases by a mere $10 per barrel, would likely be one with inflation in excess of 2% to 2.5%."

Consumers could be coping soon with a specter of the 1970s stagflation, where very slow or no economic growth occurs, unemployment is high and prices for food and energy rise, said C.J. Brott, founder of Capital Ideas, a registered investment adviser in Dallas, and a portfolio manager with Covestor, the online investing marketplace.

“A weaker dollar will buy fewer units of foreign currencies which means that Americans will pay more dollars for the same bushel of wheat or barrel of oil,” he said.

One reason stagflation poses a concern is because economic growth is expected to continue growing “very slowly,” Brott said. “That means wages may not rise quickly enough to keep up with price inflation,” he added.

Since the economy is facing fewer headwinds than European or Asian countries, the Fed is “likely more concerned about deflation, since the collapse of core commodity prices has a greater negative impact than some modest inflation,” said Patrick Morris, CEO of New York-based HAGIN Investment Management. Deflation occurs when the prices of services and goods are declining.

“In terms of risk, the Japanese-style persistent recession seems the most likely scenario because of the increasing numbers of unemployed or underemployed highly educated young people living at home,” he said.

Although inflation is not an immediate concern, it can pose a threat in the future, said Hamrick.

“There’s inflation as measured by official metrics such as the Consumer Price Index and there’s what we actually have to pay for, such as health insurance or college tuition or sudden or unexpected events,” he said.

Maintaining a budget which has a healthy amount of savings for emergencies and retirement can alleviate issues which crop up in the future.

“As part of savings and investing, one wants to work to ensure that inflation doesn’t erode the value of cash,” Hamrick said. “To do that, one has to assess how much risk one is willing to take in exchange for a hoped-for better return.”