(NEW YORK) — Inflation has eased in recent months but remains sky-high, especially for some household items like eggs and flour.
Price hikes for other products, however, have not only slowed but reversed altogether, offering much-needed relief for buyers, government data released this week showed.
Used cars, for instance, cost roughly 10% less than they did a year ago. The price of bacon has dropped 4% over that time, the data showed.
Still, the overall surge in prices traces back to the pandemic-induced supply bottlenecks that made it harder to access a slew of goods, including essentials like gas and food.
Meanwhile, COVID forced billions worldwide indoors, shifting demand away from concert tickets and restaurant meals and toward the exact goods in short supply. The Russia-Ukraine war has exacerbated the shortages and sent prices even higher, experts said.
Some price drops show an easing of the dynamics behind inflation, but many items reveal a unique dynamic playing out in a corner of the economy with little connection to broader economic headwinds, experts said.
“Every good, every service has its own story,” Mark Zandi, the chief economist at Moody’s Analytics, told ABC News. “Whether you’re talking about a pound of ground beef, a gallon of milk, an iPad or a medical procedure.”
Here’s what you need to know about which prices are falling and why:
Steaks and bacon
Grocery shoppers may have noticed a friendlier price tag on some meat products.
The price of uncooked beef steaks has fallen 3% over the past year; while the cost of bacon has dropped nearly 4% in that period. Other pork products, like roasts and ribs, have undergone a price decline of almost 2%.
Those price decreases may appear slight but they contrast starkly with the cost of another protein staple: Eggs. The cost of eggs has jumped 70% over the past year, government data showed.
The decline in meat prices owes to a drought in the Western U.S. that has made it more expensive for farmers to raise some animals, said Zandi. In response, farmers have culled their herds and delivered a glut of meat, sending prices downward temporarily, he added.
“For the time being, we’re enjoying falling prices because they’re slaughtering more cattle,” he said. “That means ultimately smaller herds and prices will rise more in the future.”
Smartphones, televisions and home assistants
The most dramatic price drops have arisen in consumer electronics, where some popular items cost much less than they did a year ago.
The cost of a smartphone has fallen nearly 24% over the past year, while the price of a TV has dropped about 13%. Smart home assistants cost 6% less than they did a year ago, the government data showed.
The drop in electronics prices owes to a decadeslong trend in the sector: Over time, a new product or technology loses its novelty and its price falls, Elizabeth Renter, a data analyst at personal finance research firm NerdWallet, told ABC News. At the same time, companies often find more cost-effective ways of producing a given technology, further reducing its price.
The price of televisions, for instance, has declined annually by double-digit percentage points for decades, Renter said. Smartphones, meanwhile, have fallen in price since the government began collecting consumer price data on them in 2019, she added.
“It’s not so novel to have a smartphone or a flatscreen anymore,” Renter said. “Prices tend to come down.”
A pandemic-era financial force has amplified the longstanding cost savings in electronics, however, Zandi said. At the outset of COVID, consumers forced indoors shifted from buying services to goods, such as televisions; but they’ve reversed that shift, cutting demand for and pushing down the price of electronics.
“In the teeth of the pandemic we were buying stuff – now we’re not,” Zandi said. “We’re buying trips to Europe or going to see the Eagles play or going to a restaurant.”
Used cars
The easing of another pandemic-related price pressure has slashed the cost of used cars, which has fallen more than 11% over the last year, Greg McBride, chief financial analyst at Bankrate.com, told ABC News.
A COVID-induced supply chain disruption led to a shortage of auto parts, especially the electric chips used in many car models, McBride said.
As some of the supply bottlenecks have loosened up, car parts have become more accessible and the supply of cars has moved back up toward pre-pandemic levels.
“In the early stages of inflation taking off, used car prices were one of the big contributors,” McBride said. “As there’s been an easing of some of the manufacturing backlogs, we’re seeing downward pressure on used car prices.
Renter acknowledged the improvement of some supply challenges but also attributed the price drop to a base effect, in which price changes appear to be an improvement because the current price is compared to the highly elevated price point where products stood a year ago.
“We’re seeing a return to something closer to normal after historic highs,” she said.
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