Have we seen the last of inflation? Don’t count on it

January 3, 2025/Business/

It doesn’t matter what type of Death Care business your are in. . . funeral home, crematory, casket supplier, vault company, chemical company. . . . the odds are that you have seen your costs of business go up in the past four years — since inflation started creeping up sometime in 2021.

You probably have your thoughts on your sales prices of your products pretty well set for 2025, but what might near future inflation do to change that outlook? Depending on which indicator you look at, “cumulative inflation” has increased prices over the past four years from 17-22%. . . . however, that number could continue to rise in the future if history is an indication.

What that “cumulative inflation” means, is if your input costs have went up on that same average, a funeral service that you charged $10,000 for in 2021 would have to be sold at $11,700 to $12,200 today simply to stay at the same profit levels.

This current wave of inflation hit its peak when in June 2022 prices were listed at 9.1% higher than at the same time in June of 2021 (See article and table). Since that time we have seen a reduction in year over year inflation reaching down to a 2.7% level in November of 2024 as compared to November of 2023. The goal is to reach a “healthy inflation” figure of around slightly over 2.0%.

Will we get there soon? That remains to be seen, but I think the last miles of inflation reduction can be sticky. . . especially if this episode is anything like the last big episode in my life — which happened from about 1975 to about 1983. And, there are a couple of things in common with that time period. . such as a new Presidential administration promising tax cuts to Americans.

While we have made progress so far in the fight against inflation, please take a look at this graph from the 1975 episode which shows that after making progress for a while, inflation took off again. That’s something that I hope we can avoid.

I think it is somewhat hard to get inflation to continue its downward trend when there are certain “late business increases” by government entities that may raise prices going forward. In my opinion, government, being as big as it is and as methodical as it is, is sometimes behind the curves that happen in finances. . . . and that is a worrysome situation in my book.

Tom Anderson
Funeral Director Daily

For instance, I just recieved notice that my local municipal utility will be increasing monthly facility charges at an 8.3% annual clip, and utility demand rates from 7.5% to 8.6% depending on useage amounts. And, I’m guessing that I’ll have a property tax increase coming on board to help the city, county, and school district catch up to their inflationary costs also.

That’s about 4 times what experts say “healthy” inflation is. . . .and I think it is indicative of government finally catching up in raising income to meet already risen inflationary costs. In my book, I believe that businesses have been adjusting price increases much faster and may be almost done doing so, but I also think that government increases are still to come.

So, my point is, while I think business, that can act quicker than government, is getting caught up to the recent past inflation, don’t be surprised if you see some inflationary increases that might surprise you coming from public sector entities. . ..

The great thing about being a small, independent business is that you have the ability to turn and manuever like you are riding a jet-ski rather than piloting an aircraft carrier. It may be that in 2025 that pivoting skill will be necessary. . . .

Related Article — “Amid trade tensions and sticky inflation, Bryant expert shares U.S., global economic predictions for 2025.” Bryant University – Bryant News (RI)

More news from the world of Death Care: