Businessweek Archives

Tale of Three Prices


I thought I’d pick on the furniture industry some more. Here’s a graph of the price of imported furniture; the producer price of furniture from U.S. manufacturers; and the consumer price (all are done as indexes, set to April 2003 =100)

What do we have here? According to the BLS, both the price of imported furniture and the producer price of furniture from U.S. manufacturers have been rising at roughly the same rate over this period.

If we believe these figures, then it’s hard to explain why furniture imports have soared over this period, and why the U.S. furniture industry has been offshoring at a rapid pace.

And if we believe these figures, it’s also hard to explain why the consumer prices of furniture have been falling.

In fact, it’s clear that the import price figures do not include in any way the sharp cost drop from offshoring.


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