Inflation eased in July, rising 8.5% compared to the same month last year, based on the Bureau of Labor Statistics’ July consumer price index report. That was slightly less than the CPI increase in June of 9.1%. The details told the story. While the gas index fell 7.7% compared to June, it was still up 44% compared to July last year. Meanwhile, the cost of food continued to jump.
While Americans face a cost of living challenge unlike anything in decades, the prices of several household items declined, a rarity in such a widely inflationary environment. The drop was particularly pronounced among consumer electronics. The price of smartphones plunged 20% year over year. Although there is no ready answer as to why, there has been a price war among the three largest wireless companies — Verizon, AT&T, T-Mobile — to gain market share. The price of televisions fell almost 15%.
Unfortunately, very few items declined in price in July, with many regularly used items soaring in price. Fuel prices overall were up year over year, in some cases by double digits, despite the June easing. And the price of common foods like eggs also spiked. (Fight inflation, don’t buy these 9 items.)
There continues to be a battle over how inflation can best be brought under control before it causes a full blown recession. A recession may have already started as both first quarter and second quarter GDP fell. The Federal Reserve continues to raise rates at a pace not seen since before The Great Recession.
Critics who said the Fed began hiking rates too late and at first too slowly, now warn of a recession as a result of the recent aggressive Fed moves. Inflation, they claim, is already baked into the economy because of low unemployment and difficult supply chain problems. (Russia’s war in Ukraine and pandemic supply constraints are creating price pressures worldwide. Here are products with skyrocketing prices around the world.)
It is a very good bet that the number of items that will drop in price every month in the near term will be few and far between.
To determine the household items that are dropping in price, 24/7 Wall St. reviewed the BLS’ Consumer Price Index Summary July report. Prices are compared to July 2021.
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