The price of this household item plunges – 24/7 Wall St.
August’s inflation rate, as measured by the consumer price index, rose 8.3%. At first glance, this appeared to be an improvement from the rate of 9.1% in June and 8.5% in July. However, the number could be misleading. Gas, oil and heating oil prices have fallen sharply in recent weeks. Excluding the latter, inflation continued to be close to four-decade levels.
Although they are really the exception, for very few products and services prices have come down. And the price of smartphones is plunging.
In general, the fall in the price of fuel should not be ruled out. The American family and many businesses came under financial pressure when gasoline prices hit a record high of $5 a gallon for regular fuel, nationally averaged three months ago. Fortunately, the number has dropped to $3 per gallon recently. Yet oil prices remained higher in August compared to a year ago, a period when these prices were exceptionally low.
Food prices continued to be the biggest inflation issue for many Americans. For example, the price of butter last month increased by 25%. The price of eggs rose almost 40% year over year in August. (This is where most people need food stamps in every state.)
Unfortunately, most of the items that fell in price in August year-over-year are non-essential. Smartphone prices have fallen by 20%. Despite the release of the new iPhone 14, most people absolutely do not need a new smartphone on a regular basis. The price of televisions has fallen almost as much.
Prices for computer software and hardware also fell. Again, these are not prices that typical Americans regularly incur. (Probably not buy non-essentials, that’s how long a typical person can live on savings alone in each state.)
Basically, lower prices for a few goods and services mean almost nothing to the larger problem of inflation. More and more Americans cannot afford the essentials, and this is especially true for people whose wages have not kept up with rising prices. Even middle-class Americans are facing enough increases in the cost of living that their discretionary income can come under pressure.
The solution to lower prices for many components of the CPI is likely to be higher unemployment. Soaring costs are reducing consumer spending – and with it corporate profits. These problems, in turn, trigger layoffs. America hasn’t been in an economic cycle like this for over a decade. Unfortunately, a huge problem may have to be replaced by another.
To determine the 13 household items that are falling in price, 24/7 Wall St. looked at the August report of the Bureau of Labor Statistics’ Consumer Price Index Summary. Prices are compared to August 2021.
Click here to see the price of this household item is plunging.