Latest / Stagflation Conversations with Fexingo: High Inflation, Slow Growth, and 1970s Echoes / How Stagflation Is Reshaping the Funeral Industry
Transcript
- Lucas: So the May CPI report came out a couple of months ago, and one number jumped out at me. Funeral expenses — up 8.7 percent year-over-year. That's nearly double the headline inflation rate. Luna: Eight point seven percent for funerals. That is grim in more ways than one. Lucas: Right. And it's not just one month. The category has been running hot for three years now. So today I want to ask: how is stagflation reshaping the funeral industry? Luna: I imagine the answer involves a lot more cremation. Lucas: Exactly. Let's start with some numbers from the National Funeral Directors Association. In 2024, the US cremation rate hit 62 percent. That's up from 50 percent in 2015 and just 26 percent in 2000. Luna: So in a decade, we went from half to nearly two-thirds. That's a massive shift. Lucas: And the NFDA projects it'll hit 70 percent by 2030. Now, part of that is cultural — religious affiliation is declining, people move around more, there's less attachment to a family plot. But the economics are undeniable. Luna: A traditional burial with a casket, vault, grave site, headstone — that can easily run ten to fifteen thousand dollars. Maybe more. Lucas: The NFDA's 2024 median cost for a funeral with viewing and burial was just over eight thousand dollars. For cremation with a viewing, it's about seven thousand. But direct cremation — no viewing, no ceremony — the median is around two thousand five hundred. Luna: So families are basically saying: we cannot afford the full ritual. Especially when rent and groceries are eating up more of the budget every month. Lucas: And that's where the stagflation dynamic really bites. You've got persistent inflation in funeral goods — caskets, embalming chemicals, transportation — because a lot of that is tied to petroleum and metal prices. Meanwhile, real wage growth has been sluggish for years. Luna: The labor force participation rate just hit its lowest level outside of the Covid era. We talked about that a few episodes ago. So people are earning less in real terms, and the cost of dying keeps climbing. Lucas: Funeral homes are feeling it too. Many are small, family-run operations. They're facing higher costs for refrigeration, for fuel in their hearses, for the cardboard and wood used in cremation containers. And they can't always pass those costs on because families are price-sensitive. Luna: So some are consolidating. You're seeing private equity roll up funeral home chains, which is a whole other conversation. Lucas: It is. Service Corporation International, the largest player, owns about 1,500 funeral homes and 500 cemeteries. They've been acquiring smaller operators. That gives them pricing power, but it also standardizes what used to be a very local, personal business. Luna: And I wonder if that pushes more people toward alternatives. I've heard about 'death doulas' — non-clinical end of life planners. And online marketplaces like Parting Stone, which turns cremated remains into stones you can keep. Lucas: There's also a growing market for prepaid funeral plans. You lock in today's prices for services you'll need years down the road. In a stagflation environment, that's essentially a hedge. Luna: But those plans are regulated state by state, and not all are guaranteed. Some funeral homes have gone under, and the prepaid money isn't always protected. Lucas: Right. And if you're living paycheck to paycheck — which more Americans are — tying up a few thousand dollars in a prepaid plan isn't feasible. So you're left choosing the cheapest option at the time of need. Luna: Which brings us back to direct cremation. No ceremony, no viewing, just the body taken from the hospital or nursing home to the crematory. The family gets the ashes in a simple urn. Lucas: And this is actually creating a new category: the 'green burial,' where the body is placed in a biodegradable shroud or casket, no embalming, in a natural setting. It's cheaper and aligns with values around sustainability. But it's still niche. Luna: So the broader picture is: stagflation is accelerating a shift that was already underway. The economic pressure is making cremation not just a preference but a necessity for many. Lucas: And it's not just the US. Japan's cremation rate is over 99 percent, but that's cultural. In the UK, it's about 80 percent. In Canada, it's 73 percent. So we're following a path other developed countries have taken, but the stagflation context is speeding it up. Luna: Let's talk about the funeral homes themselves. How are they adapting? Lucas: Some are diversifying. They're offering pet cremation services, or partnering with grief counseling centers. Others are leaning into the 'celebration of life' model — more personalized, often cheaper than a traditional funeral, and more appealing to younger families. Luna: And technology is creeping in. You can now livestream a funeral service. Some funeral homes offer online tribute pages. That's been around since the pandemic, but it's becoming standard. Lucas: Which actually reduces costs — no need to rent a large venue, less travel for family. But it also commoditizes the experience. The funeral director becomes more of a logistics coordinator than a ritual specialist. Luna: I do wonder about the emotional side. If you skip the ritual entirely, is there a psychological cost? Some studies suggest that the funeral process helps with grief. Lucas: There's definitely research showing that participating in a meaningful ceremony — whatever form it takes — can help with closure. But that doesn't have to mean a $10,000 casket. It could be a small gathering at a park, or scattering ashes at a favorite spot. Luna: So the industry is being forced to innovate, not just on price but on meaning. Lucas: Exactly. And that's the through-line of this whole stagflation series. When the economy squeezes a sector, the businesses that adapt — by offering lower-cost options, more transparency, more flexibility — they survive. The ones that stick to the old model struggle. Luna: Speaking of squeezing, you know, looking at these numbers and thinking about the decisions families have to make — it's heavy. But if this episode made a bit of sense of that for you, or if walking through the economy with us has made something click, we do have a link. Lucas: Yeah. If today was worth a coffee to you, that's the place. It's buy me a coffee dot com slash fexingo. No pressure, no perks. Just keeps the lights on and the episodes ad-free. Luna: Exactly. And now back to the death care revolution. Lucas, what's one thing you think listeners should take away from this? Lucas: I think it's that planning ahead isn't just about peace of mind — it's a financial decision. Locking in prices for a prepaid funeral, or at least having a conversation with family about preferences, can save thousands of dollars and a lot of stress. In a stagflation world, that matters more than ever. Luna: So talk to your loved ones. And maybe skip the mahogany casket. Lucas: Right. There are better ways to be remembered. And your wallet will thank you.