How Your Mobile Phone Plan Disconnected Inflation
U.S. economist traces slowdown to mobile provider plans.
Look over at your mobile phone. It helped slow inflation.
According to the Wall Street Journal, core inflation, which excludes food and energy categories, increased less than two percent year-over-year as of last month, and core prices dipped in March, the first time that occurred in seven years.
So what was the main cause of such limited inflation? Paul Ashworth, chief U.S. economist at researcher Capital Economics, recently explained “that nearly half of the decline in core CPI inflation this year can be traced to a single item: wireless telephone services,” per the Journal.
In other words, your mobile phone service, the price point for all your to yammering, texting, recording, and video-chatting to friends and relatives.
Per Labor Department statistics, mobile plan prices dropped nearly nine percent between March and April, and since April 2016, service prices are down nearly 13 percent.
The cause of the dip is likely competition between mobile providers, notes Ashworth, but that won’t hold off inflation for long. “(It’s) hard to improve on an unlimited data plan,” he notes.
This article was featured in the InsideHook newsletter. Sign up now.
Suggested for you