In the August 2018 Employment Report, economist Bruce Steinberg looks at the curiously low rate of inflation on consumer goods of late.
Have you ever heard of “the Amazon effect?” The transparent pricing and “algorithmic pricing technologies” of online markets is capping inflation for both online and brick and mortar retailers.
“However,” Steinberg notes, “another explanation of the Amazon effect is that it may only be just-in-time supply chain systems on steroids that improve productivity from product development all the way to delivery to the end customer. As staffing professional and executives realize, many services provided by the staffing sector can be considered as ‘just-in-time labor supply’.Those in the staffing sector are more than aware of how vendor management systems / management service providers as well as development in the online labor market have and are disrupting staffing services, which we discussed in detail in May and June 2015 (click on the months to see those discussions). We did not make the connection at the time, but perhaps these systems and just-in-time labor supply aspect of the staffing industry are also helping to keep wage growth as well as inflation in check.”