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Digital Cameras Capture Picture Of Emerging Inflation?
Digital Cameras & Camcorders | Mar 26, 08
With the Fed slashing interest rates and the dollar falling through the floor, perhaps it's no wonder we're not seeing the kind of digicam price cuts consumers have grown accustomed to.
A quick glance at PriceSCAN's digital camera indices demonstrates that the sharp declines of 2005 and 2006 gave way to a period of far more stability in '07 and the beginning of this year, with some upticks as well. Interestingly, we've actually seen recent price increases for some of the more prominent digicams. For example, over the last two months the average price of the Canon PowerShot S3 IS, currently the most popular camera on PriceSCAN, has risen about 17% to over $325; the lowest offered price is flat over this period but up some 10% over the last sixteen weeks (see graph below).
Time Period: 3/13/2006 through 3/24/2008
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
Likewise, the average price of the most sought after Nikon on our site, the D40 Digital SLR, is up around 2% off its lows and has seen some four months of price stability, with the lowest price also flat.
Time Period: 11/27/2006 through 3/24/2008
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
The scenario is similar for many of the more desired digicams we track, and this is significant because it marks at least a temporary end to the sharp declines of the last few years. Those drops took place during a period of blistering technological innovation and (relative) currency stability. But the megapixel resolution explosion has ebbed, and a weaker currency may be supporting imported camera prices, even in the face of a weakening economy (hey, don't they call stuff like that "stagflation"? Oh, I know – that's so '70's.).
Declining technology prices have helped keep inflation in check for at least the last decade and a half, but now significant categories of tech goods seem to be showing signs of stable and even rising prices (see "Flat-Screen Prices Still, Well, Flat; Some Even Rise" and "Blu-ray Boosts Inflation As HD-DVD Dies"). To be sure, the evidence is anecdotal and the trends are relatively new, but it might behoove the Fed to take a long, hard look at the recent behavior of PriceSCAN's indices.
Posted by jeffrey.trester (Permalink)
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