The signals may be small _ a pink T-shirt here, a baby's rattle there _ but shopper's are starting to see price savings in a number of goods as a result of the protracted financial crisis in Asia.
While the overall Consumer Price Index was flat in March, indicating the absence of any general inflation or deflation, prices in several categories of merchandise, many of which are produced in Asia, have fallen over the last several months.
Some manufacturers that have their goods assembled in Asia appear to be keeping cost savings to themselves, leaving retail companies and consumers alike frozen out of any boon. Still, shoppers are starting to enjoy savings in a variety of products, in some cases dramatically. Retail prices of toys, on average, fell 3.3 percent between March 1997 and this March, compared with a 4 percent rise at the beginning of 1997, according to the Bureau of Labor Statistics, which compiles the CPI.
Leading the way were video games and toys like crib mobiles and rattles, whose prices fell as much as 20 percent in some cities last month.
Prices of clothes have dropped, especially those for infants and women. Apparel prices, after being on the rise through much of 1997, are now back to where they were a year ago.
The collapse of currencies throughout much of Asia means that the dollar buys much more in countries producing everything from mascara wands to Barbie dolls, from department store sweaters to athletic shoes. And the economic weakness there translates into desperate manufacturers willing to cut prices in order to unload goods that otherwise would go unsold.
Combined with a drop in oil prices and pressure on domestic manufacturers to keep prices down, Americans are enjoying bargain-basement deals even as their nominal incomes continue to rise at roughly 3 to 4 percent a year.
Just Thursday, the Commerce Department's report on the nation's economic performance in the first quarter showed that inflation, at least for now, had essentially vanished. Indeed, the domestic purchases deflator _ which tracks prices paid by consumers for goods sold in the United States, both imported and American-made _ actually fell 0.1 percent, the first time that has happened since 1959, when Dwight Eisenhower was president.
"The American consumer has more spending power," said James Glassman, senior U.S. economist at Chase Manhattan Bank. "Between the strong dollar and the collapse in Asian currencies and the fact that oil prices are coming down so our heating bills are down, we can buy more goods than we used to."