Weekly Updates
Weekly Updates
- Nothing typified the 2021 transitory goods price inflation quite like televisions. The pandemic confined consumers to their homes with little to do but watch Netflix and let their cash savings accumulate. As people began to realise just how barbaric it was to be forced to watch Downton Abbey on a small screen, they discovered that they had the financial means to remedy that situation.
- The result was soaring consumer demand. Global supply could not match this surge in global demand. Even without pandemic disruptions, demand was so extreme that factories could not cope. Along with the prices of many other durable goods, global television prices shot higher. In the US, prices peaked over 7% above their January 2020 levels.
- This was never going to last (hence “transitory”). US television demand is now below the pre-pandemic trend. If you bought a new television in 2022, you probably won’t buy a new television in 2023. Televisions are now cheaper than January 2020 levels in the US, the UK and the Euro area.
- This is a small part of a general durable goods disinflation. It is a reminder to challenge assumptions that inflation must be “sticky”. The laws of supply and demand do still operate, at least when it comes to television prices.
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