Weekly Market Commentary
June 15, 2021

Inflation and Innovation

The Markets

Media analysts were plucking the inflation daisy petals last week. On Thursday, the Bureau of Labor Statistics released the Consumer Price Index Summary, which showed prices were up 5 percent year-to-year.

Investors are debating whether the surge in prices at both a producer and consumer level will prove transitory, as the U.S. Federal Reserve believes, or become entrenched.

Inflation psychology occurs when consumers believe prices will continue to rise over time and begin to spend money as soon as they receive it, according to Investopedia. There is a remedy, according to Curtin. “A shift in the Fed’s policy language could douse any incipient inflationary psychology, it would be no surprise to consumers, as two-thirds already expect higher interest rates in the year ahead.”

NECESSITY IS THE MOTHER OF INVENTION…Businesses have been finding innovative solutions to labor issues forever. For example, dogs were once bred to cook, according to Popular Science’s podcast, The Weirdest Thing I Learned This Week.

When people relied on fire to roast meat, the spit was an invaluable tool. However, turning a spit for hours wasn’t a popular job, so dogs were bred and trained to turn spits. “The first mention of the turnspit dog…was in 1576…The long story short here is that people bred terrier-like dogs to…fit easily into these treadmills that powered various kitchen aids, but primarily the roasting spit.”

By some accounts, the poor working conditions of turnspit dogs in New York hotels contributed to the founding of the American Society for the Prevention of Cruelty to Animals (ASPCA).Thank God for that.

Today, pandemic labor shortages have sparked innovation. Companies that are having difficulty finding workers are adopting technological solutions. For example:

•    Modern-day food automats. A vast improvement over food vending machines, some restaurants are using technology to replace servers. Patrons order on a screen and the food is delivered in numbered cubby holes. The kitchen staff is in the back preparing the orders.

•    Grab-and-go groceries. People scan an app before they enter a grocery store that has no cashiers. As they shop, cameras and sensors track what they remove from shelves or bins. “…the technology had to be tweaked to account for how people squeeze tomatoes to test for ripeness or rummage through avocados to find just the right one,” reported Joseph Pisani of the Associated Press. (Tip: When shopping in grab-and-go groceries, don’t take items off high shelves for other shoppers – you may be charged if the person you helped leaves the store with the goods.)

•    Bricks-and-mortar online shopping. A women’s clothing boutique outfitted its new stores with screens so shoppers may select the clothes they want to try on. Then, the shopper is escorted to a dressing room where the clothes are hanging in a wardrobe. “Another touch screen in the dressing room lets you request even more items and sizes, but instead of awkwardly trying to hail a salesperson in your underwear, you just close the wardrobe, and someone in body-con Narnia adds it through the back,” reported Emilia Petrarca of The Cut.

What’s your favorite pandemic innovation?

Focus On The Positive

“Before you become too entranced with gorgeous gadgets and mesmerizing video displays, let me remind you that information is not knowledge, knowledge is not wisdom, and wisdom is not foresight. Each grows out of the other, and we need them all.” ―Arthur C. Clarke, Writer11