This week let’s look at a chart that has been called “Chart of the Century”.
This chart was created by economics professor Mark J. Perry. While the data is from the US I think these trends will likely be similar in many other countries.
The chart shows relative price changes of 14 consumer goods and services over a 22 year period. It shows that goods and services subject to strong foreign competition like televisions, toys and computer software have become relatively cheaper over time. However, prices of non-tradeable goods and services like hospital services and education have increased drastically. Tumbling prices of tradeable goods essentially help offset growing costs of non-tradeable goods and services.
Over this 22 year period the CPI for all items increased by 74.4%. Three goods and services increased considerably more than average inflation of 74.4% - hospital services (220%), college tuition and fees (178%) and college textbooks (162%). These are followed by medical care services (130%), childcare and nursery school (115%), food and beverages (82%) and housing (80%). Average hourly wages, also shown on the chart, increased by 100% over this period. Three goods and services become much more affordable – televisions (-97%), toys (-72%) and computer software (-70.5%). The relative prices of cars, household furnihsings and clothing have remained relatively similar over the period.
Do you think these trends apply in your country too?
YES IT DOES, BUT NOT NECESSARILY IN THESAME ORDER.
IN MY COUNTRY I WILL RANK FOOD, BEVERAGES AND HOUSING MOST EXPENSIVE BEFORE HOSPITAL SERVICES THEN MEDICAL SERVICES.
WE ARE IN A GALLOPING INFLATION @ 21.1% RIGHT NOW.
THE RISE IN FOOD ITEMS SEEMS UNSTOPABLE