What Happened to U.S. Inflation? Look at These Quirky Categories
(Bloomberg) -- Not only did U.S. inflation cool in August, but Americans paid less for some goods and services -- much less in several cases.
The broader figures caught some analysts off guard, who were largely expecting steady underlying inflation amid a healthy economic expansion and cost pressures at businesses that should boost costs for consumers. Economists such as JPMorgan Chase & Co.’s Michael Feroli said price gains remain on an upward track despite the latest Labor Department figures released Thursday.
While August’s slowdown may be a blip -- and several quirks were in typically volatile or hard-to-measure categories -- the monthly declines ran across a variety of goods and services. Here are some items that saw dips, so maybe it’s time to start haggling:
The medical care index fell 0.2 percent for the second month, the heftiest back-to-back decline on record.
Behind the drop: Dental services declined a record 0.8 percent and health insurance was down the most since November. On top of that, the medical-care commodities index fell 0.3 percent, led by a drop in nonprescription drugs and medical equipment and supplies.
One business where people still paid up? Nursing homes and elderly care, categories that were up as much as 1 percent.
There’s plenty of fodder for those looking for evidence of retail weakness: The apparel index posted a 1.6 percent drop, the biggest since 1949. Men’s clothing fell the most in more than a year, and women’s apparel and shoe prices also declined. You might pay back those discounts with a 0.3 percent rise in laundry and dry-cleaning services.
Clothing wasn’t the only down item, though. Recreation-goods prices fell 0.5 percent from July, dragged down by declines of more than 1 percent each in televisions and video and audio products.
Major appliances dropped 0.5 percent, the biggest decrease since February, with laundry equipment posting the first dip in five months following tariffs that had boosted prices. Prices also fell for bedroom furniture and for a component covering clocks, lamps and other decorator items.
Now may be the time to do Christmas shopping: Toy prices fell 1.4 percent, the most since May, while stationery, supplies and gift wrap down a record 1.8 percent. Meanwhile, amid back-to-school season, educational books and supplies declined 2.1 percent, the most since 2001.
What wasn’t cheaper? Smoking, wine, parking and death.
Prices for tobacco and smoking products rose 0.1 percent in August, while drinking wine at a restaurant or bar increased the most in five years. If you’re parking somewhere, those costs ticked up 0.3 percent. And funeral expenses increased 0.3 percent for the second month.
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