The inflation numbers continue to roll in, and the news is bad. April inflation showed a slight decline from 8.5% to 8.3%. This slight improvement unfortunately looks problematic when examined in detail because almost all the decline came from a dip in gasoline prices that have since reversed. The concerning news was that price increases have spread broadly to food, travel and entertainment. Airline prices rose at the fastest rate ever – up 18.6% from the prior year.
Airlines are struggling because consumers excited by the end of the mask mandate are filling all available seats. In the meantime, airlines are unable to hire enough workers, from pilots to ground crews, to satisfy demand. One of my pilot friends had previously applied to be an airline pilot with no success. Last month, three airlines called him back, and two offered him jobs. Employee shortages are compounded by higher jet fuel prices and longer, more expensive international routes since airlines no longer fly over Russia or Ukraine. All these factors mean higher ticket prices just as the summer travel season begins.
Supply chain issues have been compounded by new China shutdowns and are leading to higher prices for manufactured goods. Autos continue to be in short supply, so car companies are increasing prices. New car prices increased by 13.2% from the prior year. New cars now mostly sell for sticker price or more. Manufacturer subsidies that used to make leasing an attractive alternative to buying have disappeared, increasing the cost of a leased vehicle.
The result of all this inflation is a very difficult life for consumers, as wage growth has not kept up with the increase in prices.
So, the challenge for all of us is how to work through this difficult time. Supply chains have not been able to keep up with demand. This problem will work itself out over time, but the immediate pain is real.
There is a way to help both your personal situation and the market in general. The solution is to simplify.
We have lots of purchase options and through online markets the ability to buy almost anything. We also have the seldom-used option to not buy now. If we all choose to buy fewer things, we can reduce the pressure on the supply chain. One of my friends recently went 30 days without making a purchase. He and his wife cooked out of the food pantry and the freezer. They also did not shop for anything and rode their bicycles to work. They told me that it was a challenge, but by the third week they were so invested in the challenge that they didn’t want to fail in their quest. They saved a lot of money but did end up eating some odd meals at the end of the month.
The one-month no-purchases challenge may be extreme, but one week or three days could be doable. The point is not to become a monk, but by reducing our own consumption make more goods available for people on fixed incomes who struggle to live month-to-month.
None of us can control inflation, but most of us can simplify and reduce pressure on the supply chain. So, the challenge is to live simply so that others can simply live.