Retailer inventories are rising
Michael > November 25th, 2022, 11:54 AM
We've all been hit hard by inflation this year. It was predictable, and not solely due to the stimulus money the Trump and Biden administrations sent out in 2020 and 2021. The lockdowns in China, the breakdowns in world logistics networks, the rising cost of oil - all of these factors contributed to the inflationary pressures.
But inflation doesn't happen consistently across the board. Home and vehicle prices may be high but in consumer goods a lot of product prices are dropping. If you need to replace some things that cost a few hundred dollars (like electronics), now may be a good time to do some online shopping.
I had to replace my laptop computer. I damaged it last year and had it repaired at a cost of several hundred dollars. I went the repair route because replacement costs were exorbitant (more than twice what I originally paid for it).
This year that computer had several catastrophic crashes due to the physical damage. The drive was failing. It took a day, last time it crashed, for me to get it back into operational mode. Most people would have given up (so I say, based on online discussions I've read about people with similar problems). Windows 10 will occasionally refuse to boot up, and you need to be really patient with it (rebooting and going into maintenance mode to force it to repair as much as it can). I had to do that repeatedly.
So I copied my data to an older, slower laptop and started shopping online for a replacement. My wife finally found a great deal for me.
My old laptop - that is, the most recently purchased one that crashed - was running on a 10th generation Core i5 CPU with 8 Gb RAM and a 2-terabyte Optane drive. The Optane drives were developed by Intel a few years ago. They combine traditional (slow) hard drives with a 32-Gb RAM cache controller. It was very fast compared to our older laptops (including the one I used as a backup).
I paid about $750 for the Optane-based laptop. Replacing it with similar or newer technology would have run to about $1500 last year.
When I started looking for a replacement again in September, prices had come down to about $1100-1200. I could get a better system but didn't want to pay that much. I'm just being cheap. There were certainly less expensive laptops on the market, but always trade up, I say.
Turns out, Costco started running a Christmas special last weekend. My wife found a laptop for me that met my minimum criteria for less than $1,000.
It's running on a 12th generation Core i7 CPU, has 16 Gb of RAM, and a 1-terabyte Solid State Drive. We paid for an extended warranty so the entire deal cost a little over $900.
I follow the economic news closely. I read a lot of stories about supply chain problems, manufacturer problems, retailer inventories, and American consumer surveys. I knew the consumer product inventories were rising because American households have cut back on non-essential spending. We're paying more for groceries, gas, and housing and that leaves less money in the budget for toys and gadgets. But retailers are still getting shipments that they ordered months, and in some cases years ago.
So some prices are coming down. And as I needed a new computer, I'm glad to see the prices of some computers have come way down.
I also bought (from Amazon) an external Solid State Drive for less than $100. It holds 1 Tb of storage. I've been using a 2-Tb external hard drive to backup and move data between laptops. But that hard drive is slow compared to the SSD.
So, if you're in need of a good deal, I think you can find them (while supplies last) with all the major retailers.
But we're not out of the woods yet. It will take years for the economy to recover from the pandemic. Of course, it would help if the Biden administration rolled back the Trump tariffs on imported goods and raw materials, but I guess they're not going to do that because of political differences with China. The tariffs never made sense as it's American consumers who pay them. It was just a sneaky way to raise taxes on consumers while making it look like China would suffer.
The theory behind tariffs is that if you make it more expensive for your citizens to pay for goods manufactured overseas, they'll turn to domestic alternatives - thus depriving the overseas manufacturers of revenue.
The problem with many of the Trump tariffs is that there weren't any domestic alternatives for consumers to turn to. So we all continued to buy things made in China and other countries, but we had to pay more. When the pandemic hit, many pundits argued, it would have helped to remove those tariffs.
Of course, we've never been through anything like this before. Maybe removing the tariffs would only have increased demand for foreign goods that couldn't be delivered. But be that as it may, now is a better time to buy some of the goods that were impacted by the pandemic, supply chain problems, and tariffs as prices ARE coming down on some types of non-consumable goods.