Six Things Technology Has Made Insanely Cheap
For anyone bearish on the progress made by the U.S. economy, consider this: Computers are now one-1,100th of their price 35 years ago.
Innovation makes things cheaper, which frees up cash for consumers to buy other things. That drives the virtuous cycle of economic growth. We dug into the inflation data, more formally known as the personal consumption expenditures price index, to highlight some of the items that have seen the biggest discounts.
1. Personal computers
PCs have recorded the largest decline since January 1980 in the Bureau of Economic Analysis' breakdowns. It's a mind-blowing 99.9 percent price drop. The chart below shows the biggest share of the plunge taking place in the 1980s, but don't be complacent: Prices are still dropping. In January, computers were 9 percent cheaper than they were a year earlier.
Computer software now costs 0.7 percent of what it did in January 1980. Since some of the world's most-used software today is free, this is no surprise.
TVs today are 3 percent of their price in January 1980.
4. Securities commissions
You can thank the Internet and the e-brokerages that emerged as a result. It used to be a lot more expensive to buy and sell stocks and bonds, and that cost was rising through the 1970s. It took until the mid-90s to really plunge. Now it's about a third of what it was in January 1980.
Not that many people are buying cameras in the age of the iPhone, but in case you're curious: Photographic equipment is now 75 percent cheaper than what is was in January 2000.
6. Cell phone service
It probably doesn't feel like it when you pay your monthly phone bill, but trust us, it would have been a lot worse if cell service hadn't gotten cheaper. It's now costs less than half of what it did in January 1990.
Note: Some of the price declines reflect a concept called hedonic adjustments. Government statisticians estimate the value of the newest techy enhancement and subtract that from the price of the latest model.