Bidenflation: Business Inflation Expectations Jump to New High

It’s not just U.S. households feeling squeezed by higher prices. Businesses are coming under pressure also.

Expectations of U.S. businesses for inflation in the year ahead rose to a new high in October, data from the Federal Reserve Bank of Atlanta showed on Wednesday. On average, firms expect 3.3 percent inflation.

On average, companies said their unit costs have risen 3.6 percent, the biggest increase in data going back a decade.

 

On average, companies expect unit costs to rise 3.3 percent. The share saying they expect costs to move up “very significantly” jumped to 27 percent.

Around 40 percent of companies say they expect both labor costs and nonlabor costs to put significant upward pressure on prices. About 30 percent of firms expect sales levels and margin adjustments to put moderate upward pressure on prices.

Seventy-three percent of companies said that they expect to increase products or services that make up the largest share of their sales. Sixty-seven said they had increased prices on those products and services over the last year.