Inflation? The economy is still humming along!May 06, 2022 10:35AM ● By Bryan Gray
It’s an old saying: “Pay attention to what a person does, not what he says.” This is currently applicable when we are talking about inflation.
Utah pollsters report that we are seriously worried about it. Gas prices are especially galling since we are daily reminded as we routinely drive past the Maverik and the Chevron stations, and we know that housing prices continue spiraling even though it doesn’t directly impact us unless we are buying or selling. And then there’s the trip to the grocery store; golly, we’ll have to cut back on pickle spears this week!
So the polls say that Utahns believe the economy – the entire financial world – is preying upon them. They blame government spending. They fear a recession. They see life as we know it evaporating.
Yet, despite this widespread fear, I don’t see that anybody is really cutting back on spending. Ironically, their spending is the major component of the thing they worry about: inflation! As the Pogo comic strip once noted, “We’ve seen the enemy – and it is us!”
KSL-Radio recently reported how inflation has affected the cost of a cheeseburger (lettuce up 12%, mayonnaise up 14%, etc.). But ask the counter guy at Burger King if customers are cutting back on Whoppers with cheese.
National reports say inflation may be costing families $700 more a month, but the restaurants that I visit are doing quite well. (“Reservations for Thursday night at 6 p.m.? Sorry, but we’re full until 7:30.) Yes, the cost of bacon is up 17% and the avian bird flu has boosted up the price of eggs. But the owner of my weekday breakfast spot has seen no decrease in people ordering omelets and bacon sandwiches.
As for coffee, he increased the price 40 cents per cup last month, yet his customers are not decaffeinating.
Airlines have boosted the price of flights, yet Delta reported last week that sales increases are at historic highs…Those long lines at the Swig haven’t gone down. Folks are still rewarding themselves with an overpriced Diet Coke with a splash of lime…One would think people could easily reduce their clothing purchases, but the stock price of Lululemon (where you have to take out a second mortgage to buy yoga pants) is sitting close to a new high.
In my own field of work, we have more new printing orders this month than I can ever recall despite rising prices due to the unavailability of many printing papers. Disneyland increases its resort prices, yet no one I know is canceling their visit to the happiest place on earth. Visit a car dealer, and chances are you will be put on the waiting list for a $60,000 truck.
I’m not saying that inflation isn’t a problem and I assume some people are reducing their travel when they see the price at the gasoline pump. But the Federal Reserve rate increases will tamp down on the overheated economy, and most economists see inflation leveling off at about 5% by the end of the year.
So stop all the hand-wringing. Today’s inflation is not the Black Plague and, from what I see at the restaurants, airports, and shopping malls, the economy is humming along just fine, thank you.