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Less Cereal in the Box: The Secret Inflation of Goods | Newsmax

Here is a WSJ headline of April 29, 2019: “S&P jumps 17% this year, as economy picks up without driving up prices.” As a student of the U.S. stock market I always wondered why major companies were able to report a healthy profit increase, yet admitted to no, or only meager, increases in sales. What gives?
In our era of relative price stability, a constant sales volume with rising profits can only mean one thing: That packages of consumer items contain less consumable goods.

Have you ever read the label on a cereal box? You will find out that the contents shrank from 35 ounces of last year to only 32 ounces this year. This is a hidden price increase of 9.3% even thought the sales price and the box size remain the same.

If you buy a tube of tooth paste you will discover that the carton and the marked price is the same as last year. However, if you pull the tube out of the box, you find that now it is ½” shorter than last year’s 5” long tube. Again, a hidden 10% price increase. Or, take a bottle of Aspirin. Last year the bottle was half filled with pills and the rest was cotton fiber. Today you will see 10% more cotton and a like amount of fewer pills.

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Less Cereal in the Box: The Secret Inflation of Goods | Newsmax.com.

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