When someone moves, they usually do so to find a more affordable place to live. That immediately affects the market. Let's look at some severe implications movers have on the economy and inflation.
Inflation is often a result of a negative supply shock. If the economy is suffering from too little demand, then some price pressures may push up the price of goods and services. However, if the economy suffers a decrease in supply, perhaps because of an increase in oil price, then this could lead to a rise in prices. This increase in prices is referred to as inflation.
One of the main ways people combat this negative supply shock is by moving out of oil-rich regions and into areas where energy is less expensive. The more people that move out of oil-rich regions, the more downward pressure will be placed on the price of oil. Over time, this could cause a demand reduction and thus a further fall in oil prices.
Many people perceive inflation as just a number representing an increase in prices or the aggregate price index number for a given period. However, inflation is not just about how high prices rise; it's also about how goods and services change over time.
Moving is not just an enormous undertaking but also a costly endeavor. For example, moving companies in 2018 charged about $121 for the first 100 pounds of your belongings, with additional expenses for each hundred-pound increment. That would cost you well over $2,000 to move ten bags from one location to another. Movers inject this money into the economy, resulting in inflation due to increased money supplies.
The new home you purchase will have many items that must be unpacked and put away. The cost of moving and storage affects the individual's spending habits. Movers often withdraw their savings to cater for moving and storage expenses, thus injecting money into the economy, which may increase inflation rates.