The Price of This Household Item Is Plunging

By Douglas A. McIntyre Published Feb 16, 9:00AM EST

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The Price of This Household Item Is Plunging — © Zephyr18 / iStock via Getty Images

The Federal Reserve has stated it will raise interest rates as many as four times this year in an attempt to curb inflation. Many experts believe this will be too little too late. The consumer price index rose by 7.5% in January compared to the same month last year. That was the largest increase since February 1982.

While prices of some items have surged around 60% year over year, the price of food at schools is plunging. (Conversely, the price of this household item is soaring.)

As the year wears on, among the most substantial concerns is that inflation will result in consumers pulling in spending, which has been robust even during the COVID-19 pandemic. Price increases erode consumer spending, and this can sharply slow the economy. Consumer spending is about 70% of the U.S.’s gross domestic product.

The latest signal of this problem is the February release of the University of Michigan Survey of Consumers. In sum, the researchers reported: “Sentiment continued its downward descent, reaching its worst level in a decade, falling a stunning 8.2% from last month and 19.7% from last February.” Inflation was singled out as the primary trigger for the decline.

Harvard economist and former Treasury Secretary Larry Summers has been warning about the problem for months. He recently said, “It’s clear that inflation is the dominant economic problem as seen by the American people. It’s clear that inflation is significantly contributing to distrust in the institutions and to pessimism about the future.”

What if the Fed does become aggressive and raises rates several times this year? It will result, among other things, in higher interest rates across a number of areas, including mortgage rates. Historically low rates have helped drive the extraordinary rise in home prices. That, in turn, has increased home equity, which is a major part of the net worth of many people.

The balancing act of rate increases and inflation is clearly delicate.

The prices of some household items – goods and services Americans use everyday – have dodged the effects of inflation almost completely, and in a number of cases prices have fallen. 24/7 Wall St. reviewed the recent Bureau of Labor Statistics consumer price index report to find the household items with price declines in January.

Not surprisingly, the cost of food at schools and businesses has fallen sharply, almost certainly because of a COVID-19 drop in demand. Interestingly, the price of smartphones has also fallen, as the major wireless carriers chop prices to pick up market share. (These are the most popular phones of all time.)

Click here to see the price of the household item that is plunging

15. Frozen noncarbonated juices and drinks
> Price decrease, Jan. 2021 to Jan. 2022: -0.2%

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14. Wireless telephone services
> Price decrease, Jan. 2021 to Jan. 2022: -0.5%

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13. Men’s pants and shorts
> Price decrease, Jan. 2021 to Jan. 2022: -0.8%

12. Audio equipment
> Price decrease, Jan. 2021 to Jan. 2022: -1.2%

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11. Recreational books
> Price decrease, Jan. 2021 to Jan. 2022: -1.2%

10. Cosmetics, perfume, bath, nail preparations and implements
> Price decrease, Jan. 2021 to Jan. 2022: -1.7%

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9. Tenants’ and household insurance
> Price decrease, Jan. 2021 to Jan. 2022: -1.7%

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8. Computer software and accessories
> Price decrease, Jan. 2021 to Jan. 2022: -2.0%

7. Ship fare
> Price decrease, Jan. 2021 to Jan. 2022: -2.1%

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6. Video discs and other media
> Price decrease, Jan. 2021 to Jan. 2022: -3.5%

5. Girls’ apparel
> Price decrease, Jan. 2021 to Jan. 2022: -4.3%

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4. Telephone hardware, calculators, and other consumer information items
> Price decrease, Jan. 2021 to Jan. 2022: -7.1%

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3. Smartphones
> Price decrease, Jan. 2021 to Jan. 2022: -13.3%

2. Food at employee sites and schools
> Price decrease, Jan. 2021 to Jan. 2022: -46.9%

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1. Food at elementary and secondary schools
> Price decrease, Jan. 2021 to Jan. 2022: -59.8%

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.