Finally a little good news.
There’s a reason the cost of consumer goods has skyrocketed since the summer months. Supply chain problems have delayed the distribution of many common products and commodities. At the same time, the US economy has improved. With fewer unemployed, American consumers had more money to spend and the demand for the commons increased.
Because the demand for these products has exceeded the supply, the prices have gone up – this is Economy 101 for you. But that hasn’t made things any easier for consumers, especially those who live paycheck to paycheck with no savings to fall back on.
In October, the consumer price index, which measures changes in the cost of consumer goods, was up 6.2% from a year earlier. It’s a big leap.
Will consumer prices soon start to fall?
There has been good news on the supply chain front recently. It appears that some of the bottlenecks that have plagued consumers are finally easing. US port congestion is not as bad as it was weeks or months ago, in part thanks to the transformation of a number of key ports into round-the-clock operations. delivery are improving. This could, in the coming weeks, lead to lower consumer prices.
It is too early to start celebrating the end of runaway inflation. While supply chain issues are improving, they have not gone away. The United States continues to experience a shortage of truck drivers, and computer chips are still in short supply. That alone has an impact on the production of everything from home electronics to vehicles.
In fact, despite the aforementioned improvements, it could be months before supply chains catch up with demand and prices really start to drop. And this is something consumers should be aware of.
Weathering the Inflation Storm
We could see recent price hikes reverse in the first half of 2022 if supply chains really pick up the pace. But that means consumers could still contemplate months of sky-high prices.
Those without savings to fall back on may need to spend wisely over the next few months to avoid taking on debt. This could mean cutting back on leisure, or even adjusting essential expenses, like downsizing to save money on rent.
Another option for cash strapped consumers is to find a second job. Nowadays, there are a plethora of lucrative side activities to choose from, and a temporary increase in income might be just what helps workers avoid getting into debt until prices start to drop.
Many companies these days are desperate to hire, so finding part-time positions can be easier than before. Plus, there are plenty of side gigs that can be done independently, like entering data at home or driving for a rideshare company, so scheduling constraints can be bypassed.
The good news is that soaring inflation won’t last forever, and could subside relatively early in 2022. But consumers will need to take strategic steps to manage their money until it actually happens.