One year ago, a 50-inch Hitachi television cost US$1,400 at Circuit City. It costs US$1,000 today.
Five years ago, automakers charged US$25,500 for the average new vehicle. They charge about US$24,500 today.
A decade ago, a round trip on Delta Air Lines between New York and San Francisco cost US$388 -- and it was part of a sale. Delta now sells the same advance-purchase ticket for US$317.
Most stunning is the price path of Burger King's Whopper sandwich, which cost about US$1.40 some 20 years ago, when the Dow Jones industrial average hovered around 1,000 and hourly wages were about one-half their current level. This weekend, a Whopper sells for US$0.99 cents.
Deflation, a sustained decline in prices across the economy, remains merely a threat, with overall prices still rising mildly. For some of the nation's largest industries, though, falling prices are a reality. The costs of cars, clothing, electronics, furniture, jewelry, kitchen equipment and toys -- indeed, of most manufactured goods -- have been dropping for more than a year, causing turmoil for companies and their workers. Although airlines and fast food are among the only industries in the service sector to be suffering through declines, overall service prices are rising more slowly than they were two years ago, according to figures released last week.
"More goods are chasing less money," said Arthur J. Rolnick, research director at the Federal Reserve Bank of Minneapolis, "instead of more money chasing fewer goods."
Worried about falling prices, the Fed lowered its benchmark interest rate again late last year. Officials say deflation remains unlikely but, because it is so hard to stop once it starts, they are taking preventive measures.
The lack of pricing power has been forcing executives to cut costs even as they increase production, and it has helped to make the current economic recovery a jobless one. Almost 200,000 jobs were eliminated across the country in November and December.
The squeeze has also cost some chief executives their jobs, like Jack M. Greenberg of McDonald's, who resigned last month, shortly before the company announced its first quarterly loss since going public 38 years ago. Other companies, including airlines, automotive suppliers and, last week, FAO, the toy retailer, have filed for bankruptcy protection.
The biggest culprit is the 1990s bubble that left many industries with more goods than they could profitably sell and more capacity than they could use. But the surge of imports from low-cost countries like China, the rise in American productivity and the continuing trend toward deregulation and market-determined prices are all playing roles.
Faced with stagnant revenue, many companies are aggravating their industries' troubles by further reducing prices to grab pieces of a shrinking pie.
The weak economic growth of the last year has caused poultry prices, for example, to drop about 1 percent. Tyson Foods, the world's biggest seller of chicken, has responded by offering more promotions to supermarkets, said John Tyson, the chief executive.
General Motors, the first automaker to offer zero-percent financing after Sept. 11, 2001, expanded its incentives last month to match the deals offered by Ford Motor, after GM cut them back in November.
"We go to 0 percent, 36 months, then the guys who were griping about incentives go to 60 months," Rick Wagoner, GM's chief executive, said in an interview, referring to competitors. "And guess what? They get big market share, and we don't."
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