You may not have noticed your big-ticket purchases are getting cheaper
- Prices for bigger-ticket goods like furniture and used cars are falling despite overall inflation.
- The consumer price index rose 2.5% year-over-year, but durable goods prices have declined.
The prices for many goods are falling.
However, you may not have noticed unless you've made a big-ticket purchase in the last year.
The consumer price index rose 2.5% year-over-year from August 2023 to August 2024, a drop from July's 2.9% rate. But prices for durable goods like furniture and used cars actually flat-out fell in the latest report — and have been for the last two years.
Furniture prices, for example, are down 5.1% year-over-year — with larger declines for living room, kitchen, and dining room furniture. Appliances like laundry equipment are down 3.2%, while items such as lamps and clocks are 2.1% less expensive.
Overall, apparel is up 0.3%, though men's apparel has fallen by 0.8%. Shoes, jewelry, and watches have also fallen slightly.
Transportation costs are 4.4% lower this year compared to last year, with prices for new vehicles down 1.2%. Prices for used cars and trucks, which skyrocketed in June 2021, peaking at a whopping 45.2% inflation rate, are down 10.4% year-over-year — and 20.2% since February 2022. Vehicle parts and tires have also fallen slightly.
In addition, prices for many of America's favorite pastimes have fallen. Prices for video and audio products are 2.5% lower, while televisions are down 5.6%. Sporting goods have declined 2.3%, while toys and games have fallen 3.2%. However, photography equipment has shot up 14.7%, while books are also up.
However, many Americans might not have noticed that steep fall in prices over the last two years, given that they only purchase larger items like a couch, cellphone, or car infrequently. A slight decline in price for these purchases might mean little when everyday necessities like grocery and rent prices continue ticking up.
Overall inflation remains elevated largely due to housing costs, with the CPI shelter index up 5.2% over the year. Insurance, medical costs, and recreational activities like movies or sporting events have also gotten more expensive.
With an election under two months away, many Americans are still concerned about inflation for essentials. Consumer sentiment is slowly elevating, though there exists a consumer sentiment gap between wealthier stock-owning households and less wealthy Americans worried about retirement or putting food on the table.