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Debunking the deflation myth

By Maxine Shapiro, KERA 90.1 business commentator

Dallas, TX – Even if you're not a Fed watcher, you are probably aware deflation has returned as the worry of the week. Lower prices - I don't see it. I'm Maxine Shapiro with KERA Marketplace Midday.

As I was reading through my myriad of financial websites, I finally found an article questioning whether inflation was really dead. I was beginning to doubt my sanity. Sure, it's a fact I don't go to a department store unless what I need is on sale, and sales are almost a weekly occurrence. So besides clothing, computers, televisions and automobiles are said to be cheap. But I don't need a new computer, I still feel I spent too much for the new TV and no matter how you slice it, an automobile is a big a chunk of change. And of course, lucky you if you frequent any fast food chain the past two years. My gut can't handle it.

But what about the other essentials in our lives? The price of those items is going up. CNN/Money has done the research and they concur. Health care costs top the list of concerns. Like most commodities, the price of energy goes up and then goes down. Health care has been on a one-way track up with no looking back. A 2002 report found U.S. healthcare expenditures have increased 87% since 1990.

Here's the rest of the list: college tuition this school year went up an average of 9.6% for a four-year public school. Private schools rose almost 6% to a cost of over $18,000. Need I remind you homeowner's insurance in Texas rose 57%? As the assessment rate for our homes increases, so does our property tax. Phone companies keep sneaking in rate hikes, as does our cable company. In the first three months of this year, prices for cereal and bakery products rose at an annual rate of over 9.5%. And "the price of admission to movie theaters and concerts went up 6.8%," so says an economist with the Bureau of Labor Statistics.

Deflation? I don't think so.

For KERA Marketplace Midday, I'm Maxine Shapiro.


Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.

Email Maxine Shapiro about this story.