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Shoppers queue in like outside the Apple store during the launch day of the new iPhone 14 series smartphones in Hong Kong, on September 16, 2022.

Miguel Candela | Anadolu Agency | Getty Images

The closely-watched consumer price index continues to show headline inflation in the U.S. hovering at levels last seen in the mid-1980s.

Prices for a wide variety of goods and services, including food, airfare, and gasoline rose in the latest reading released last week. All told, on a 12-month basis, headline inflation was up 8.2%, according to the Bureau of Labor Statistics, which publishes the CPI.

But one product category monitored by the CPI recorded a 22% plunge, showing deflation: Smartphones.

That might seem counterintuitive. Most phones are expensive and prices for the best ones aren’t going down. Apple released new iPhones in September at the same U.S. prices as last year’s options, for example. And Samsung’s high-end devices cost as much as $1,800 this year. Average selling prices for smartphones continue to climb in markets around the world.

It turns out, smartphones aren’t getting cheaper. They’re getting better. And that’s why CPI shows them deflating instead of inflating like lots of other goods.

Here’s why: Normally, the CPI likes to compare prices for identical items which don’t change much from year-to-year. So, it might compare eggs against eggs, for example. But in the case of smartphones, BLS has to control for devices that get better each year. If smartphones are improving and the price is staying the same, then BLS records a price decline.

“There’s been a lot of declines in the [smartphone] index. And that’s really just in large part dealing with the quality improvements,” said Jonathan Church, an economist at BLS.

Twice a year, BLS looks at the new smartphone models and measures how they’ve improved — whether they have better cameras, displays, or other new methods.

“For smartphones, we’re talking about things like screen size, RAM, processor speed, phone camera or rear camera, whether it’s foldable, or things like that,” Church said.

Then, BLS makes a “quality adjustment.” If the price of the new iPhone didn’t rise, but it received new features, then the CPI would consider that device to be more valuable than the old one, and it assumes consumers get more value for the same money.

Estimating the size of the quality adjustments is done with a hedonic modeling method and BLS uses data from a third-party dataset that includes smartphone specs.

Or, as BLS puts it: “If a replacement smartphone is different from its predecessor and the value of the difference in quality can be accurately estimated, a quality adjustment can be made to the previous item’s price to include the estimated value of the difference in quality.”

BLS has indexed smartphone technologies to a starting point in late 2019, when Apple’s newest device was the iPhone 11 and Samsung’s best was the Galaxy S10. In fact, smartphone prices have been deflating since 2019, according to the CPI.

Eventually, Church said, smartphones may mature into the kind of product that would see price increases and inflation. But the rate of improvement would have to slow down.

“It’s really only that a certain mature point in the cycle that their price will start to go up again,” Church said. “It seems pretty early in the lifecycle still, smartphones in general.”

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Amazon was questioned by House China committee over ‘dangerous and unwise’ TikTok partnership

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Amazon was questioned by House China committee over 'dangerous and unwise' TikTok partnership

Amazon logo on a brick building exterior, San Francisco, California, August 20, 2024.

Smith Collection | Gado | Archive Photos | Getty Images

Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok, CNBC confirmed.

A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.

“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.

Representatives from Amazon and TikTok did not immediately respond to CNBC’s request for comment.

TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.

President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok, and said in a March interview with CNBC’s “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.

In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.

— CNBC’s Jonathan Vanian contributed to this report.

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Amazon launches fixed pricing for treatment of conditions such as hair loss. Hims & Hers stock drops 15%

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Amazon launches fixed pricing for treatment of conditions such as hair loss. Hims & Hers stock drops 15%

A worker delivers Amazon packages in San Francisco on Oct. 24, 2024.

David Paul Morris | Bloomberg | Getty Images

Amazon on Thursday announced Prime members can access new fixed pricing for treatment of conditions like erectile dysfunction and men’s hair loss, its latest effort to compete with other direct-to-consumer marketplaces such as Hims & Hers Health and Ro.

Shares of Hims & Hers fell as much as 17% on Thursday, on pace for its worst day.

Amazon said in a blog post that Prime members can see the cost of a telehealth visit and their desired treatment before they decide to proceed with care for five common issues. Patients can access treatment for anti-aging skin care starting at $10 a month; motion sickness for $2 per use; erectile dysfunction at $19 a month; eyelash growth at $43 a month, and men’s hair loss for $16 a month by using Amazon’s savings benefit Prime Rx at checkout.

Amazon acquired primary care provider One Medical for roughly $3.9 billion in July 2022, and Thursday’s announcement builds on its existing pay-per-visit telehealth offering. Video visits through the service cost $49, and messaging visits cost $29 where available. Users can get treatment for more than 30 common conditions, including sinus infection and pink eye.

Medications filled through Amazon Pharmacy are eligible for discounted pricing and will be delivered to patients’ doors in standard Amazon packaging. Prime members will pay for the consultation and medication, but there are no additional fees, the blog post said.

Amazon has been trying to break into the lucrative health-care sector for years. The company launched its own online pharmacy in 2020 following its acquisition of PillPack in 2018. Amazon introduced, and later shuttered, a telehealth service called Amazon Care, as well as a line of health and wellness devices.

The company has also discontinued a secretive effort to develop an at-home fertility tracker, CNBC reported Wednesday.

— CNBC’s Annie Palmer contributed to this report.

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WikiLeaks whistleblower Chelsea Manning says censorship is still ‘a dominant threat’

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WikiLeaks whistleblower Chelsea Manning says censorship is still 'a dominant threat'

Chelsea Manning: Censorship still a dominant threat

Former U.S. Army intelligence analyst Chelsea Manning says censorship is still “a dominant threat,” advocating for a more decentralized internet to help better protect individuals online.

Her comments come amid ongoing tension linked to online safety rules, with some tech executives recently seeking to push back over content moderation concerns.

Speaking to CNBC’s Karen Tso at the Web Summit tech conference in Lisbon, Portugal, on Wednesday, Manning said that one way to ensure online privacy could be “decentralized identification,” which gives individuals the ability to control their own data.

“Censorship is a dominant threat. I think that it is a question of who’s doing the censoring, and what the purpose is — and also censorship in the 21st century is more about whether or not you’re boosted through like an algorithm, and how the fine-tuning of that seems to work,” Manning said.

“I think that social media and the monopolies of social media have sort of gotten us used to the fact that certain things that drive engagement will be attractive,” she added.

“One of the ways that we can sort of countervail that is to go back to the more decentralized and distribute the internet of the early ’90s, but make that available to more people.”

Nym Technologies Chief Security Officer Chelsea Manning at a press conference held with Nym Technologies CEO Harry Halpin in the Media Village to present NymVPN during the second day of Web Summit on November 13, 2024 in Lisbon, Portugal. 

Horacio Villalobos | Getty Images News | Getty Images

Asked how tech companies could make money in such a scenario, Manning said there would have to be “a better social contract” put in place to determine how information is shared and accessed.

“One of the things about distributed or decentralized identification is that through encryption you’re able to sort of check the box yourself, instead of having to depend on the company to provide you with a check box or an accept here, you’re making that decision from a technical perspective,” Manning said.

‘No longer secrecy versus transparency’

Manning, who works as a security consultant at Nym Technologies, a company that specializes in online privacy and security, was convicted of espionage and other charges at a court-martial in 2013 for leaking a trove of secret military files to online media publisher WikiLeaks.

She was sentenced to 35 years in prison, but was later released in 2017, when former U.S. President Barack Obama commuted her sentence.

Asked to what extent the environment has changed for whistleblowers today, Manning said, “We’re at an interesting time because information is everywhere. We have more information than ever.”

She added, “Countries and governments no longer seem to invest the same amount of time and effort in hiding information and keeping secrets. What countries seem to be doing now is they seem to be spending more time and energy spreading misinformation and disinformation.”

Manning said the challenge for whistleblowers now is to sort through the information to understand what is verifiable and authentic.

“It’s no longer secrecy versus transparency,” she added.

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