Hidden Driver of Inflation?

[NATI BENGALS]

We see a lot of blame going around for inflation.

One thing I don’t see mentioned too often as a possible contributing factor of inflation is the natural disasters.

https://www.ncei.noaa.gov/access/billions/

“In 2024 (as of April 8), there have been 2 confirmed weather/climate disaster events with losses exceeding $1 billion each to affect United States. These events included 2 severe storm events. Overall, these events resulted in the deaths of 6 people and had significant economic effects on the areas impacted. The 1980–2023 annual average is 8.5 events (CPI-adjusted); the annual average for the most recent 5 years (2019–2023) is 20.4 events (CPI-adjusted)”

So from 1980-2023 we averaged 8.5 weather events a year that caused $1,000,000,000+ in losses.

And when you look at more recent history 2019-2023 we averaged 20.4 weather events a year that caused $1,000,000,000+ in losses.

Apparently we have a busy hurricane season forecast. And Texas is getting some major flooding right now. And tornadoes have ripped quite a few places up already this year.

Am I crazy to think the cost of recovery from more numerous weather disasters fuels inflation?

[*pally*]

(05-03-2024, 11:32 PM)NATI BENGALS Wrote: We see a lot of blame going around for inflation.

One thing I don’t see mentioned too often as a possible contributing factor of inflation is the natural disasters.

https://www.ncei.noaa.gov/access/billions/

“In 2024 (as of April 8), there have been 2 confirmed weather/climate disaster events with losses exceeding $1 billion each to affect United States. These events included 2 severe storm events. Overall, these events resulted in the deaths of 6 people and had significant economic effects on the areas impacted. The 1980–2023 annual average is 8.5 events (CPI-adjusted); the annual average for the most recent 5 years (2019–2023) is 20.4 events (CPI-adjusted)”

So from 1980-2023 we averaged 8.5 weather events a year that caused $1,000,000,000+ in losses.

And when you look at more recent history 2019-2023 we averaged 20.4 weather events a year that caused $1,000,000,000+ in losses.

Apparently we have a busy hurricane season forecast. And Texas is getting some major flooding right now. And tornadoes have ripped quite a few places up already this year.

Am I crazy to think the cost of recovery from more numerous weather disasters fuels inflation?

Absolutely it drives inflationary sectors
Weather phenomena especially has certainly negatively impacted food costs worldwide.

[NATI BENGALS]

(05-04-2024, 12:42 AM)pally Wrote: Absolutely it drives inflationary sectors
Weather phenomena especially has certainly negatively impacted food costs worldwide.

Wow, I wasn’t even thinking of food. I was really only considering construction. But damn when you start to think about the impact on the food supply chain… shit

[JustWinBaby]

(05-04-2024, 09:21 AM)NATI BENGALS Wrote: Wow, I wasn’t even thinking of food. I was really only considering construction. But damn when you start to think about the impact on the food supply chain… shit

I'm pretty sure global food production has been increasing, and continued to increase, all along.  Despite what you hear, the frequency and severity of weather events has not shown a statistically significant increase.  There have always been losses from weather events, but actually higher CO2 and longer growing seasons has contributed to an INCREASE in food production.

That said, food prices are impacted by many other inflation factors, such as labor, fossil fuel costs (no only for harvesting and transportation costs, but fertilizer).

It takes time to get used to higher prices.  Unless you have deflation, which most economists agree is bad for an economy built around growth, prices never go back down when inflation is structural rather than transient (i.e. a temporary disruption in the balance of supply & demand).