Gene Marks Asks: Is Inflation Really That Bad?
BY GENE MARKS Inflation, inflation, inflation. We keep hearing how terrible it is, but is it really as bad as it seems? We know grocery and restaurant prices are up. We’ve been warned about the impact of tariffs on consumer products. And yet people still seem to be buying. Tariffs haven’t taken much of a bite after all. Corporate profits are up, as is the stock market. Holiday sales are expected to rise 4 percent this season and GDP is projected to be around the same for the last quarter. Restaurants are busy. Airports are jammed. The current inflation rate is at 3 percent for consum- ers. This is much lower than we saw post-pandemic. It’s also lower than the average inflation rate of 3.5 percent recorded between 1950 and 2020. And yet everyone is concerned. The same goes for businesses; reports like this one are among the many that say that inflation is small businesses’ “number one worry.” I’m not sure I believe this is such a big worry. Yes, for businesses some costs are higher. But many critical costs have remained the same since the beginning of the year, when President Trump took office. Don’t believe me? Take a look at producer prices during that period. If you’re a manufacturer, like many of my clients, you’ve definitely seen significant price increases in some of your key materials over the past year. Steel piping, copper prod- ucts, machinery and equipment, industrial gases and the cost of iron and steel have gone up anywhere between 4 to 10 percent. However, many other primary costs, like corrugated pa- perboard and unlaminated polyethylene film and sheet (all used in shipping materials), plastics and resins and lubri- cating oil and greases have remained virtually unchanged, and the costs of industrial chemicals have actually de- creased since the beginning of the year by as much as 4 percent. Natural gas, a key component of energy, has fallen in cost by 50 percent since January. Both long-dis- tance trucking and deep sea freight costs to move materi- als have also fallen, from between 5 to 9 percent. When taking all of this into account, total manufacturing costs in the country have risen just 2 percent since the be- ginning of the year. Not exactly earth shattering. If you’re running a farm or in the agriculture industry, some costs, like fertilizer expenses, have gone up about 4 percent. But animal feeds, pesticides, farm machinery and equipment, farm plows, harrows, rollers, pulverizers and attachments and most other commodity farm products are mostly unchanged since the beginning of the year. Grain cost has fallen 16 percent. My clients in the construction industry have seen the average cost of all of their materials go up about 6 per-
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December 8, 2025
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