A Return to Discount Pricing
I am a huge fan of the Discount Tire store. They provide great customer service and have clean, convenient stores. We have bought four sets of tires there, but their name is a bit misleading. They rarely “discount” tire prices but they do sell tires at good prices all the time. As I was passing by one of their stores recently, it made me think of the term “discount” and how it relates to what is happening in our current economy.
A “discount” is something we were very accustomed to prior to COVID. Discounts were plentiful and available for most everything you bought. During COVID, discounts became more scarce. Prices increased dramatically on most things for a variety of reasons. Discounts return when supply is more than demand. I believe there’s already been a BIG turn in pricing and discounts will return to your daily life for some time to come.
Most economists and pundits think 2023 will be difficult and there is a slow economy in front of us. I believe that it has already begun and it has been here for quite some time. Aggregate GDP growth for the first nine months of 2022 is at 0.7%. (-1.6% + -0.6% + 2.9%). With an average of 0.233% per quarter - it’s basically zero.
2022-Q1 GDP Growth: -1.6% 2022-Q2 GDP Growth: -0.6% 2022-Q3 GDP Growth: +2.9%
source: https://www.bea.gov/data/gdp/gross-domestic-product
The most obvious signs are flashing at you every day: discount financing for new cars, retail stores discounting 30-50% off for the holidays, and financing incentives and free upgrade options in housing are just a few examples of a slowing economy.
All those COVID-related government spending programs gave people extra monies to spend…and spend they did. This has pulled demand forward and I think it’s going to take a lot longer to get back in balance than most folks on those financial cable shows are telling you. I foresee job losses to increase as continued slow to negative growth in the economy will stick around for most of next year.
I feel confident that your dollars will go further in 2023. Discounts will return in abundance and you will be rewarded by paying less for things you need and things you just want. That also includes home purchases and mortgage financing.