What's Up With Inflation and All These Shortages?

[james.hendrickson]

I went into my local Kroger this afternoon to pick up a night light for my son. I was checking the prices on crackers and cookies - they were all up by like 25% over what they normally are.

Also - the price of gas seems like its getting higher too. Filling up my truck is costing me like $44 bucks per tank - it used to cost $32.

Something else I've noticed, for a lot of products the variety isn't there in the way it used to be. For example, I was looking for some boxed juice for my kids a couple of weeks back. The store only had like 4 or 5 varieties - normally they have 10 or 12.

So, I'm wondering if you guys are seeing the same thing?

And, more importantly, what are you doing about it?

[rennigade]

We plan on doing a kitchen overhaul. Gutting down to studs. We are also removing a wall so we needed 2x4s. Going to start next month but bought 30 boards last week. The price has already gone up 20 cents. Not a big savings but also not sure how much lumber prices may go up.

I heard Xmas trees will be really expensive this year. We don't buy one so doesn't affect us.

And yes, gas prices keep rising. People will be hurting if it keeps up.

[Fishindude77]

I can typically buy whole chickens (the small fryers) for around $6 / each. Last week they were $9, a 50% increase.
Get used to it.

[ua_guy]

Global supply chain issues and domestic transportation issues. I think we're in for a world of hurt here, real soon. The ports are stuffed, and they don't have staff. There are shortages of truck drivers, trailers, shipping containers, and arcane shipping laws preventing movement of goods between US ports. 40% of all imports come through Long Beach, CA, so, for nationwide distribution, all these things are needed in big numbers. It's quite the problem, actually, because once the supply chain gridlocks, it's very tough to undo.

Then, there's the global energy crunch.... Prices and distribution have NOT been helped by Texas' massive energy grid failures. If you think gas prices rose because of single political party or figure, you're not only wrong, you can't read.

[james.hendrickson]

So here are a couple of thoughts:

First, its probably important to stay positive. My first reaction to all this was "wow, what a jacked up situation, what should I do...is money going to be worthless, can I get holiday gifts for my kids, etc.". That's not a helpful line of thinking. So probably staying positive would be a good first step.

Second, probably it would be a good idea to start your holiday shopping now.

Any other thoughts on a rational economic response?

[JoeP]

We're dialing back on spending on "wants" more now, and also being a little more aware of how the fallout from a natural disaster could be amplified. So that means I've been gathering up 20 gallons of gas for the generator, ensuring we have enough food, and keeping cash in case electronic transactions go offline.

I'll be honest: I do not like to play when prices go up as much as they have. With energy prices expected to go up 30% in my region this winter, I'm ready to set the heat to 62F and bundle up. It might make sense to use small space heaters in certain areas rather than use energy to raise the whole house a couple degrees.

[Singuy]

The market is thinking we are at near peak inflation and as supply chain works itself out, things will calm down a bit. Price of wood, corn, and other commodities that skyrocked are all crashing as one set of data point. Housing market is cooling is another set.

[Jluke]

It was only a matter of time.

when they started handing out stimulus checks I decided to increase my cash pile another 10k and also now my propane (home heating) cash fund is going to be $1200 instead of $800. Replenish to 1200
between fills.

Concerned that certain businesses will use this as an excuse to charge more.

feels like 2008ish all over again with gas prices.

[disneysteve]

James, this is exactly the sort of thing I was alluding to in another thread regarding the ongoing global economic impact of the pandemic. A lot of people thought things would start getting back to "normal" once COVID restrictions began getting lifted and businesses could reopen. In reality, that was just the start of the trouble. Once they could reopen, businesses were faced with severe labor shortages, major supply chain disruptions, and rising prices for goods and services. And that was on top of the businesses having lost billions from being closed entirely or extremely limited for several months. They're coming back already in the hole and need to recoup their losses.

Restaurants are a perfect example, though you can look at nearly any industry. They were closed for a while or maybe doing takeout only. Once they reopened, they found that they couldn't hire enough staff to operate fully so now they're limiting hours and even closing one or two days a week because they simply don't have enough people to stay open. Then there are the supply issues. We went to a restaurant recently (a large national chain) and there was a big sign on the door that they are out of chicken. We went to the same restaurant a week later and they were still out of chicken. And that's just one simple example.

We spoke to a guy recently who was opening a new store in a shopping village nearby. He keeps having to delay his opening because he can't get the store fixtures and supplies that he ordered months ago. They're sitting in shipping containers overseas waiting to be transported to the US. He has no idea how long that will take. So he has the store. He's paying rent. But he has no clue when he will actually be able to open his doors and start making money.

My job is no different either. We are very short-staffed, both with providers and support staff. Yesterday, for example, 3 of our 7 locations were short a provider. So at the same time we're seeing record numbers of patients, we don't have nearly enough staff to actually handle them all. And our hospital system lost millions and millions of dollars due to the pandemic.

What are we personally doing? Not a whole lot. Prices are what prices are and we're fortunate to be able to pay them. I do pretty regularly find empty spaces on shelves when I go grocery shopping so some weeks we just don't get certain items that we would otherwise buy.

The thing you mentioned about varieties of product also started due to the pandemic. Many companies trimmed their product lines to just the best sellers so they could maximize their production lines and keep putting out product as efficiently as they could. Some companies announced they were permanently cutting slower sellers.

[bjl584]

I'm seeing fuel prices increase.
Buying heating oil isn't going to be fun, but thankfully I don't use much.
I've been burning anthracite as my primary heat source, and the price per ton on it hasn't changed.

I'm not really doing much different, but if fuel prices keep going up I might alter my driving habits

[rennigade]

I hope people are still not being encouraged not to work in the form of extra cash plus unemployment. I know certain states were ending the extra welfare from the government. I know several people who were staying off work as long as possible since they were making just as much to stay home. Recipe for disaster. But, this is what half of America really wants.

I also hope those tenants who were "renting" for free can now be tossed on the street if they aren't paying rent. I wonder if landlords were able to go without paying banks the mortgage for the past two years?

[scfr]

We're having a house built. So far we have had to make changes in light, fan, paint, and dishwasher selections. The dishwasher situation was the most challenging. But these are Level 1 country "problems." So what have we done? Make changes, and accept that we're not going to get exactly what we want. It's a bit disappointing because every step of this process I've been carefully researching each selection and choosing what I think is the best option for us for the price. And in the case of the dishwasher, after the hours that went in to making the selection, when ours did not arrive 5 months after we ordered and paid for it and were told it might be another 6 months and even that wasn't certain it turned in to a "what can we get our hands on" situation. But it's not the end of the world and we need to keep our eye on the prize (a completed home ready to move it to).
I've caught myself walking around singing the line "there's been a load of compromising on the road to my horizon" on more than one occasion in the past couple months.

Some of the new house features may be useful given the current shortages and price increases (bidet toilets, 100% electric, features we selected to help keep energy costs down).

We haven't started furniture shopping yet, because we don't have a firm move date yet. That's going to be fun (not)! We will of course be looking at second hand options, and are prepared to possibly live with a partially furnished home for a long time.

Our vehicles are pretty efficient. One regular Prius, and we just purchases a Prius Prime (plug-in hybrid). But yes, we're paying a couple more bucks to fill up.

As far as food prices, I'm doing a bit more shopping at Grocery Outlet, which necessitates doing a better job tracking expiration dates because they sell a lot of about to expire items.
Less meat, more beans.
Once in awhile I hit the local farmstand for seasonal produce. Last week I bought apples and kabocha - nice stuff!
And once we're in our house, I'd like to learn to grow a few things such as microgreens inside the house or on the patio (we don't have the yard space for an actual garden).
Nothing drastic. Just trying to make small adjustments and stay flexible.

I still remember "The Great Inflation" and we're not there yet.

[QuarterMillionMan]

My solution let’s skip Christmas this year, baa-hum-bug. No Christmas trees, no presents or gifting. Supply issues will be difficult. Pay down your debts and buy only necessities. Does your kid really need that toy that is financing China’s economy? Ok rant over (lol).

[rennigade]

Oh, and diapers have also gone up in price. I keep seeing articles mainstream is pushing that there is a diaper shortage, but that appears be complete bullsh*t. There is no diaper shortage.

[mumof2]

I have to say that living in Australia gas prices have risen and filling up our car is getting expensive...with the major bushfires then covid hitting our food prices went up but not for awhile now, our shelves are pretty much stocked normally and have been for last 18 months..our state barely goes into lockdown so everyone is living a normal life here going to school/work, etc...so its funny how life is so different...even in our different states over here but other than a couple of lockdowns in the last couple years life has been normal...I'm sure that will change once they start opening up the international borders I'm guessing we start being like the US and have community cases and lots of them...only time will tell...gas wise we use litres so 3.7 litres equals 1 gallon and we currently pay around 1.49-1.70 per litre...so it gets expensive usually cost to fill up our car around $80-100 (which is around $73)...

Also I have already finished my shopping and have ordered a lot from overseas and it really hasn't taken that long to get it from the US and china etc...so christmas for us is done