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Pawche  
#1 Posted : Monday, November 7, 2022 4:40:24 PM(UTC)
Pawche

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Recently, I was listening to a public radio business show. The topic of inflation was discussed and the contribution of consumers was included. In this discussion, the expectation of future inflation could cause consumers to buy now in anticipation of higher future prices was considered. This could trigger a wage-price spiral. Increased demand for goods and services with a tight labor market could drive up wages and increase prices for goods and services. This then gives positive feedback for consumers to buy now to avoid higher future prices.
Later in the show, consumer spending statistics were reported. From that report it appears consumers are not moderating their spending in anticipation of a recession, at least, not as of the report date. This included a lot of discretionary spending such as restaurant dining.
These items made me consider this - Are we as consumers making it harder to bring inflation under control? Is buying in anticipation of future price hikes and/or pandemic relief social spending contributing to inflation? Food for thought.

Russell

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