SUMMARY: Consumers are angry at inflation, but they want higher wages. They don’t care about the causes of rising product prices; they want prices to go back to the way they were before the pandemic. “That ain’t gonna happen.”
56% of voters think the country is on the wrong track, up from 39% in June, per the Harris Poll; 57% think the economy is weak, up from 43% in June. But economic strength is undeniable, both in the country overall and at the household level. The economy is expected to grow 5.7% this year.
- Almost 6 million jobs were created just between January and October; the unemployment rate is now just 4.6%. The quit rate, the standard barometer of workers’ optimism, hit an all-time record high of 2.9% in August.
- Average earnings are up 3.5% this year and 4.9% annually, to $31 per hour.
- Checking accounts are 50% fatter than they were pre-pandemic, while the bottom 50% of the population now has more than $3 trillion in household wealth — up 32% just in the first half of this year, and up 55% from before the pandemic.
- Stocks hit a new record high every day last week (and yesterday, too), and are up more than 30% year-to-date.
Some brands are not worrying about higher prices they are passing onto consumers, but they should spend some time at the checkout lanes of local supermarkets. A buyer of a 156 store chain recently told me the cost of goods is going up rapidly, and those costs are being passed onto customers. When I asked him if he had seen any declines in higher-priced products, his response was, “on a unit basis, it’s across the board, but the dollars are increasing.”
Even people who have higher disposable incomes are feeling the pinch of higher prices. My neighbor, an SVP of a local company, just complained about the cost of his new Hyundai SUV, which cost him close to $60,000.
Most brands have no choice but to pass higher costs onto consumers, but very few of them are explaining why instead leaving it up to the misinformation online. That’s a mistake.
The biggest plus for any job seeker now is having “supply-chain” experience. Brands need to lower costs through better management of their supply chains, but that will take time, and there is no guarantee that it will lead to lower prices.
Higher wages, supply shortages, and OPEC are all leading to higher prices. Brands that pass along the costs are going to lose customers and wonder where they went.