No Inflation? The Tech Industry Could Have Told You That

released Producer Price Index

Technology, being a significant part of the economy, also appears to be a significant reason why inflation hasn't been a factor, according to the Labor Department:

...(P)rices for electronic computers decreased 0.8 percent in June, compared with a 4.8-percent drop in the preceding month.

In the context of the computer industry's pricing bloodbaths this year, that might count as a "firming up" of prices. But prices are still declining nonetheless.

Blogger "Ritalin", in a post titled, "Dear Lord, How Does Dell Do It?," writes about a current Dell deal, set to expire this weekend:

At one point in my life I built ever(y) computer I ever owned because it was so much cheeper to run down to your local Taiwan town and buy the parts and build your own. But at this price I could not even get out the door with the box much less the 15" LCD flat panel. $299.00 total.

But it's not just Dell. HP is offering a $249 deal - direct from its web site - on one of its consumer desktop models.

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Sponsored post

At the same time HP is slashing PC prices and printer pricing, it's also expected to slash its work force. In a research note emailed out this morning (link not available) by SG Cowen and Co., analysts wrote:

Widely expected major restructuring action under new CEO Mark Hurd looks to be around the corner...Headcount reductions in vicinity of 10K-15K likely. While a wide range of numbers have been rumored. we think most likely that restructuring cuts will be in the 10- 15K range...

The analysts expect the job cuts to save HP as much as $2.4 billion through 2007.

They might need every penny of it, if HP and Dell's drive to beat each other over pricing keeps up.