Inflation comes for back-to-school

Key takeaways

Inflation is causing families to cut back on back-to-school shopping and holiday spending, leading to smaller gifts and reduced non-essential purchases.
Rising interest rates and national debt levels are making loans and mortgages more expensive, which can hinder both consumer spending and business investment.
Girl Scout cookie sales are a significant economic activity, providing funding for programs while also teaching young entrepreneurs about resilience and financial management.
Consumers and businesses alike need to adapt to the current economic challenges posed by inflation and rising interest rates.

Summary

Inflation Impact on Back-to-School and Holiday Spending

This section discusses how inflation is affecting consumers' ability to afford back-to-school supplies, groceries, and gas. Shoppers are not only switching to cheaper brands but also buying less or cutting out non-essential items altogether. Surveys indicate families are planning to spend less this holiday season, opting for smaller gifts or fewer celebrations, and may even resort to credit for shopping. The economic pressure is linked to broader inflation trends affecting household budgets.

Rising Interest Rates and Debt Costs

The podcast explores the recent surge in the 30-year Treasury yield to historic highs, which has led the Treasury Department to increase its bond buyback programs. Rising bond yields and the crossing of the US debt threshold of $40 trillion are pushing up interest rates on loans, mortgages, and auto financing. Experts explain that higher interest rates make it more difficult for consumers and companies to borrow, which can slow economic activity and impact wage increases and corporate profits.

The Business of Girl Scout Cookie Selling

Olive, a Girl Scout known as a Cookie Queen, shares her experiences selling thousands of boxes of cookies and the pressures involved. The documentary 'Cookie Queens' reveals the competitive nature of cookie sales, which generate over $800 million annually and are crucial for funding Girl Scout programming and camps. Olive advocates for greater transparency and control over how cookie sale profits are spent and discusses her efforts to sit on an advisory board. Her story highlights resilience, entrepreneurship, and the financial dynamics behind a beloved childhood activity.

Show notes

Prices for some back-to-school supplies are up this year, alongside other essentials like groceries and gas. Shoppers aren’t just turning to cheaper brands — they’re buying less, and cutting out non-essentials. This morning, we look at how inflation could affect shopping extending into the holiday season. Then, we discuss the cost of our debt pushing up interest rates, and a North Carolina Girl Scout talks cookie selling.

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Stories featured in this episode:

“Back to school” on a budget