Inflation (CONT’D FROM PAGE 18)
cent, led by pottery, ceramics and plumbing fixtures, which have increased 7 percent. But their biggest expense — lumber and plywood — are only up about 2 percent, and steel nails, staples, tacks and spikes are up 3 percent. The costs of gypsum building materials, equipment rental and cement and concrete have remained mostly unchanged since the beginning of the year. Overheads have gone up, led by healthcare and oth- er insurance. Salaries, according to HR company ADP, have increased 4.5 percent over the past year. But hourly wages, according to HR company Paychex, have gone up about 2.6 percent (among small businesses, who employ half of the country’s workers). Interest rates and the costs of borrowing have come down this year too, thanks to fed- eral reserve cuts. All of this seems back to normal to me. Some costs are up. Some are unchanged. Some are down. Most econ- omists will tell you that “some” inflation (between 2-3 percent) is good for a growing economy. The problem is that we’ve had so much inflation over the past five years, thanks to government spending, that consumers are still reeling from the adjustment, even though our annual infla- tion is now back down to a reasonable range. Speaking of government spending, economist Milton Friedman once said that inflation “is a monetary phenom- enon” and the result of “too much money” or of a rapid in- crease in the quantity of money than an output. “Inflation,” he famously said, “is made in Washington and nowhere else.” He’s right. Our money supply — the amount of money circulating in our economy — remains at historical highs and is chasing too little output. Government spending ex- ceeds $7 trillion a year and even Elon Musk can’t make a dent in it. National debt is exploding. Until the supply of money available catches up with the demand for it, infla- tion will remain elevated. It could even go up more. But even at these current rates, it’s still not that bad. And, at least for most of my clients, it’s still very manageable. My prediction is that, barring outside events that cause another unusual spike in government spending, we’ll con- tinue to see inflation rates at the current normal levels. People will be used to this. Businesses will adjust. Oth- er topics will take priority. Gene Marks is founder of The Marks Group, a small-business consulting firm. He is a best-selling author, business keynote speaker and columnist. Gene presents
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December 8, 2025
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