The Expert Podcast

• What exactly is demand destruction?
• How it connects to inflation, gas prices, and overall economic activity.
• Real-life example: A driver continues their regular travel routine even as gas prices rise from $3 to $5 per gallon—until the cost becomes too much and they begin to drive less.
• Demand destruction kicks in not when you switch brands or buy cheaper items, but when you buy less overall.
• Grocery bills rising slowly over time also reflect this shift—eventually leading consumers to cut back on quantity, not just brand preference.
• As consumers buy less, stores sell less—causing a ripple effect in supply chains, production, and staffing.
• This chain reaction leads manufacturers to produce fewer items, which can hurt employment and shrink the economy.
• The $10 trillion stimulus during 2021 delayed this effect, but now that the extra cash is drying up, demand destruction is becoming more visible.
• Businesses may not lower prices even when demand drops, due to high fixed costs and thinner margins.
• In fact, prices may rise further as companies try to make up for lost volume by increasing unit prices.
• The irony: less demand doesn't always equal lower prices—especially during inflationary periods.
• Demand destruction can quietly fuel recessions, and even depressions, due to compounding effects at each layer of the economy.
• We ask you: Are you seeing signs of demand destruction in your daily life? Buying less gas, food, or skipping trips?