7 price tags that are falling |
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2. Electronics: Applause, applause
It's hardly news that the prices of personal electronics have dropped to what would have been garage-sale prices a decade ago. This is true of televisions (down 77.9 percent); computers (down 88.3 percent); audio equipment (down 39.3 percent); and videocassettes, video discs and other media, including rentals (down 20.4 percent).
"Televisions and audio equipment have benefited from technological change," Ginsburg says. "It became much less expensive to manufacture TV sets. With the advent of high-definition TV in more recent years, older televisions that couldn't capture high-definition TV became less valuable and the prices dropped, even though they were still being manufactured."
Increased competition and cheaper labor costs associated with overseas outsourcing played a big role in price declines. These factors, combined with new technology, helped lower the prices of other recreational electronics, including photography (down 19.3 percent) and musical instruments (down 4.1 percent).
"The switch from conventional film to electronic capturing of pictures, moving into an electronic rather than a chemical-based methodology, apparently had big savings," Ginsburg says.
What about those bargain-basement Fender Stratocasters?
"That's been affected a lot by competition," Kelly says. "Particularly, you're getting more standardized products like guitars, which are made in China and other countries."
3. Footwear: These boots were made for savings
The recent "Sex and the City" movie would have us think that every woman's closet is stuffed to overflowing with Manolo Blahnik and Jimmy Choo shoes.
Not so, says BLS apparel economist Nicole Shepler.
"I don't have any hard-and-fast data on that, but that is a very small part of what we price overall," she says. "So, I think that doesn't have much of an impact."
In fact, shoe prices have declined by 3.9 percent, thanks in large part to lower-cost foreign imports and the growth of discount outlets and big-box stores.
"You still have $200 Nikes," Shepler admits. "But I would hypothesize that that may be one of the reasons why footwear has not declined as much as some of the other clothing areas."
4. New vehicles: More features, fewer buyers
Kelly isn't afraid to state the obvious: "People are not buying cars."
Reduced demand tends to lower prices, as witnessed by the 6.6 percent drop in the price of new cars and trucks over the past decade.
Ginsburg says the automotive industry has tried to hedge consumer disinterest by using less expensive materials and boosting the features: cup holders, seat warmers, DVD players, backup cameras and the like.
Because the Consumer Price Index takes functionality into consideration, the CPI's decline in the price of new cars and trucks may in part reflect that increase in features and options.
"Motor vehicles are a relatively mature industry," Ginsburg says. "As technology improvements are brought out, we usually quality-adjust for those because they have certain value for the consumer.
"If you look at the actual price-page of the vehicle today versus 10 years ago, today's Chevy Impala is probably quite a bit more expensive but it also has quite a bit more safety features and enhancements that are deemed desirable by motorists. If you remove those quality aspects, the price difference falls quite a bit."
5. Toys: Not all fun and games
The good news for parents is that the price of toys has declined 44.4 percent over the past decade.
The bad news? In some cases, quality may have been sacrificed for profit, as witnessed by recent lead-based toy scandals.
"Most of your toys have been outsourced to other countries where labor costs are lower," Kelly says.
On the bright side, Ginsburg says the declining cost of electronics has helped drive down the price of playthings.
"Toys, games, hobbies and playground equipment are down," Ginsburg says. "I would think that's due to outsourcing and moving toward electronic devices that have become very inexpensive to produce."
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