7 price tags that are falling |
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6. Apparel: Dress for less
We may be struggling to fill the gas tank or feed the family, but we can take some solace in the fact that the cost to clothe the family has dropped 11 percent during the past decade.
Shepler theorizes that as a society, we have shifted our measure of fashion away from clothing and toward more ostentatious displays of bling, such as plasma TVs and iPhones.
"In a sense, electronics has replaced clothing as the fashionable item," she says. "It's about having the latest iPod or toy instead of apparel as reflecting status.
"The demand for clothing has certainly fallen as more
and more shoppers are looking to electronics as being the fashionable
item."
Lower-cost foreign imports and volume buying by discount
and big-box stores have helped lower price tags. This is particularly
true for the cost of boys and girls clothing, which has dropped
23.3 percent and 18.6 percent in 10 years, respectively.
"Children's apparel certainly declined a bit more, likely due to more shoppers going to discounters," Shepler says. "Outlet and big-box stores didn't exist to this extent 10 years ago."
But Ginsburg warns that the quality of those garments may not measure up.
"The length of life of a garment may be a quality factor, but it's not measurable without being able to have someone wear the garment for six months, then wear an American-made equivalent for six months and see the differences between how they wear," he says.
7. Watches: Time to save big
You may not be able to buy time as easily in a slowing economy, but you certainly can tell time for less. The cost of a timepiece fell 6.2 percent in the last decade.
Shepler says for every Rolex, there are hundreds of thousands of Timex watches that account for the Consumer Price Index figure.
"Watches are an item where you do get a little bit of the high-end goods but it's more going to focus on what shoppers are actually buying, which is going to be more of the less-expensive items, and those are going to be bought more at discounters," she says.
In fact, the price of watches, especially with the widespread adoption of digital inner workings, has declined to such a degree that many of us consider them disposable.
"Rolexes haven't really caught on with everybody; they're still buying the throwaway watches -- planned obsolescence," she says. "We would have some of those higher-end watches, but it's certainly not going to make up the bulk of our sample."
The downside
Kelly says these seven relative bargains may actually exceed their CPI-estimated savings due to the recent bumpy ride of the U.S. dollar.
"If you look at the dollar, for a long time it was falling fairly rapidly, causing some of these prices to hold up a little," he says. "Now, the dollar is stabilizing in terms of its rate of decreasing. If the dollar goes up in value, it makes foreign-made goods cheaper; in other words, it lowers the price of foreign currency so importers can buy those items cheaper."
However, there's a downside to falling prices as well, Kelly says.
"When prices are falling, people will postpone buying," he says. "So you don't necessarily want deflation; you want disinflation.
"If you start having prices going down -- as in the housing market right now where housing prices are collapsing -- people say, 'Why should I buy a house now? It's obviously a buyer's market, I'll just wait a few more months and get something even better.'"
Such prudence will likely characterize consumer behavior as the economy slows, world markets struggle to stabilize and the effects of the Wall Street bailout on Main Street become clearer, Kelly says.
"You'll find that even more of those people who have
money to spend are going to sit back and wait on the big-ticket
items," he says. "Those are durable items that they've already got
in hand but maybe don't have the latest high-def, 52-inch version
of. They're going to live with the one they have for six more months
to get something better."
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