The November consumer price index, released by the Bureau of Labor Statistics, showed that the pace at which prices of goods and services is rising was 7.1% year over year. Compared to the last decade, the figure is very high. Compared to the last several months, the pace is cooling.
Looking at prices of individual items in the index, goods and services people used most regularly, reveals that most items continue to have post price pressure. There are, however, a few exceptions. The price of smartphones is falling more than any other household item, at least according to the Bureau of Labor Statistics, dropping by 23% compared to November 2021.
Still, one of the primary problems of inflation is that the price of very few items is falling. Out of the dozens of goods and services included in the CPI, only 15 posted price drops in November. Other than smartphones, the prices of televisions dropped 17% last month, and the price of used cars and trucks was down a little over 3%. (Also see, the 15 cars that hold value the longest.)
When it comes to smartphones, however, the prices of new models certainly remain high, so what does the CPI drop for smartphones mean? The CPI generally compares similar items, chicken to chicken for example. Smartphones, however, keep improving, and the newest models are different from the previous year’s models. To reflect the technology improvements (better screen resolution for example), the BLS implements quality adjustments, discounting previous models to reflect their lower value. The drop, therefore, does not necessarily suggest that prices of smartphones are 23% lower but that the new ones provide 23% more value.
Economists wish the price of more items dropped. Inflation continues to rob Americans of purchasing power, leading to a sharp drop in discretionary spending. Among the items Americans use regularly, mainly food and fuel, the prices continue to rise. The price of fuel, in particular, will undermine household finances as the weather turns cold and fuel oil prices stay high. (These are the states where the most people live below the poverty line.)
To determine the household items that have declined in price, 24/7 Wall St. reviewed the BLS’ Consumer Price Index Summary November report. Prices are compared to November 2021.
Click here to see the price of a smartphone is falling more than any other household item, according to the BLS.
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