Financial and Monetary Systems

Charted: Here's how US goods and services have changed in price since 2000

University students holding books and talking

The cost of an education in the United States has risen steeply since the start of the 21st century. Image: Pexels/RODNAE Productions

Nick Routley
Creative Director and Writer, Visual Capitalist
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Financial and Monetary Systems?
The Big Picture
Explore and monitor how United States is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

United States

  • Since the beginning of the century, US consumers have seen a divergence of price movements across various categories.
  • This chart of the price changes provides a clear and impactful jump-off point to discuss a number of economic forces, says Visual Capitalist.
  • Here, it goes through the situation in detail, explaining why the prices of certain goods and services have fallen while others have skyrocketed.
Price changes of US consumer goods and services 2000-2023
Even though essentials like education and heathcare have rocketed up, it’s not all bad news. Image: Visual Capitalist.

Consumer Price Inflation, by Type of Good or Service (2000-2022)

The Consumer Price Index (CPI) provides a steady indication of how inflation is affecting the economy. This big picture number is useful for policymakers and professionals in the financial sector, but most people experience inflation at the cash register or checkout screen.

Since the start of the 21st century, U.S. consumers have seen a divergence of price movements across various categories. Nowhere is this better illustrated than on this chart concept thought up by AEI’s Mark J. Perry. It’s sometimes referred to as the “chart of the century” because it provides such a clear and impactful jump-off point to discuss a number of economic forces.

The punchline is that many consumer goods—particularly those that were easily outsourced—saw price drops, while key “non-tradable” categories saw massive increases. We’ll look at both situations in more detail below.

Race to the Top: Inflation in Healthcare and Education

Since the beginning of this century, two types of essential categories have been marching steadily upward in price: healthcare and education.

America has a well documented “medical inflation” issue. There are a number of reasons why costs in the healthcare sector keep rising, including rising labor costs, an aging population, better technology, and medical tourism. The pricing of pharmaceutical products and hospital services are also a major contributor to increases. As Barry Ritholtz has diplomatically stated, “market forces don’t work very well in this industry”.

Rising medical costs have serious consequences for the U.S. population. Recent data indicates that half of Americans now carry medical debt, with the majority owing $1,000 or more.

Also near the top of the chart are education-related categories. In the ’60s and ’70s, tuition roughly tracked with inflation, but that began to change in the mid-1980s. Since then, tuition costs have marched ever upward. Since 2000, tuition prices have increased by 178% and college textbooks have jumped 162%.

As usual, low income students are disproportionally impacted by rising tuition. Pell Grants now cover a much smaller portion of tuition than they used to, and the majority of states have cut funding to higher education in recent years.

Globalization: A Tale of Televisions and Toys

Even though essentials like education and heathcare have rocketed up, it’s not all bad news. Consumers have seen the price of some goods and services drop dramatically.

Flat screen televisions used to be a big ticket item. At the turn of the century, a flat screen TV would cost around 17% of the median income of the time ($42,148). In the early aughts though, prices began to fall quickly. Today, a new TV will cost less than 1% of the U.S. median income ($54,132).

Similarly, cellular services and software have gotten cheaper over the past two decades as well. Toys are another prime example. Not only are most toys manufactured overseas, the value proposition has changed as children have new digital options to entertain themselves with.

Over a long-term perspective, items like clothing and household furnishings have remained relatively flat in price, even after the most recent bout of inflation.

Discover

Beyond GDP: read the full transcript here

Have you read?
Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Financial and Monetary SystemsHealth and Healthcare Systems
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

'Cautious optimism': Here's what chief economists think about the state of the global economy

Aengus Collins and Kateryna Karunska

May 29, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum