40 Percent Of All US Goods Prices Are Falling
Cars, furniture, clothing, appliances, televisons, audio equipment, software, and toys are among the goods whose prices are falling:
Prices for 40 percent of all the goods and services in the Labor Department's consumer price index (CPI) showed year-over-year declines in September, the latest data available, according to a research note by Merrill Lynch's chief Canadian economist David Rosenberg.
Health care, education, and auto insurance are rising. I suspect that its not a coincidence that the first two have heavy government involvement.
One reason the increas in the cost of education
is the fact that during recessions, people value
education more in order to be competitive. Additionally,
during the economic boom a few years ago, entrance
to the top schools became more competitive, due to the
fact that people realized that prestigious degrees
insure good jobs. Moreover, the population of the US
experienced a secondary wave of increase from the
children of the baby boom generation who have reached
college age, significantly increasing the number of
college-bound kids. In the mean time, while many new
universities have been opening, manyless competitive
colleges have actually closed down. So this really
became a supply and demand situation, where the
supply is a little more rigid and inelastic than
ordinary goods and services, since it take a lot of
time and organization to open a new university.