NY Times Business Section, Jan. 19, 2003
A Sinking Feeling at the Register
By DAVID LEONHARDT
ONE year ago, a 50-inch Hitachi television cost $1,400 at Circuit City. It
costs $1,000 today.
Five years ago, automakers charged $25,500 for the average new vehicle.
They charge about $24,500 today.
A decade ago, a round trip on Delta Air Lines between New York and San
Francisco cost $388 � and it was part of a sale. Delta now sells the same
advance-purchase ticket for $317.
Most stunning is the price path of Burger King's Whopper sandwich, which
cost about $1.40 some 20 years ago, when the Dow Jones industrial average
hovered around 1,000 and hourly wages were about one-half their current
level. This weekend, a Whopper sells for 99 cents.
Deflation, a sustained decline in prices across the economy, remains merely
a threat, with overall prices still rising mildly. For some of the nation's
largest industries, though, falling prices are a reality. The costs of
cars, clothing, electronics, furniture, jewelry, kitchen equipment and toys
� indeed, of most manufactured goods � have been dropping for more than a
year, causing turmoil for companies and their workers. Although airlines
and fast food are among the only industries in the service sector to be
suffering through declines, overall service prices are rising more slowly
than they were two years ago, according to figures released last week.
"More goods are chasing less money," said Arthur J. Rolnick, research
director at the Federal Reserve Bank of Minneapolis, "instead of more money
chasing fewer goods."
full: http://www.nytimes.com/2003/01/19/business/yourmoney/19ECON.html
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