The recent surge in inflation is now a significant issue for smaller firms, and nowhere is this more evident than in the restaurant industry. While large firms can hedge volatility and medium-size firms can increase efficiencies to mitigate price increases, smaller firms don’t have as many ... READ MORE >
inflation
Four ways retailers and restaurants can manage current inflation and labor pressures
As the economic recovery from the pandemic-induced recession continues, consumer demand is high and the opportunity exists for a strong holiday retail and restaurant season. But these sectors are facing two significant headwinds: inflation and challenges finding qualified labor. During the recession, ... READ MORE >
Consumer Price Index surges 5.4% in June as the economy reopens
The recent surge in domestic prices continued as consumer prices increased by 0.9% on a monthly basis and by 5.4% on a year-ago basis, according to Labor Department data released on Tuesday. While the increase in prices requires close monitoring by policymakers, the gains continue to be driven by a ... READ MORE >
CHART OF THE DAY: Inflation expectations remain rational and muted
A look at one of our preferred measurements of inflation expectations implies that the risk of a sustained outbreak of inflation is receding just as another set of inflation data—the Consumer Price Index for June—is set to publish on Tuesday. Inflation expectations play an important role in spending ... READ MORE >
CHART OF THE DAY: Yield spread flattens as inflation trade unwinds
The Federal Open Market Committee unleashed a sharp change in market expectations following its Wednesday meeting, helping to curtail inflation fears. The idea of the first rate hike being pulled forward into 2023 with a possibility of 2022 elicited a change in the inflation trade and a resetting of ... READ MORE >
May CPI: Prices surge on strong base effects and economic reopening
Prices continue to rise as demand outstrips supply across a robust economic reopening in the United States. Supply chain constraints and bottlenecks are still disrupting the flow of inputs used at earlier stages of production and intermediate goods. These disruptions underscore the imbalance ... READ MORE >
CHART OF THE DAY: What caused the increase in consumer prices in April?
The debate of the moment in financial markets and regarding the direction of monetary policy centers around inflation: Is it a risk to the economy? The data and our forecast imply that while prices are rising in a cluster of industrial ecosystems that make up roughly 20% of the economy, we do not expect a ... READ MORE >
CHART OF THE DAY: Lumber futures down 33% over past month
Lumber futures have declined 33% since May 7, which likely reflects a mix of falling demand as contractors—shaken by the 372% surge in lumber prices during the past two years—back off potential projects and the slow but steady return of supply. In our estimation, this is one of the key input prices ... READ MORE >
The difference between noise and signal in U.S. wage growth
The pandemic and the economic shutdown it prompted have injected an inordinate amount of noise into the economic data, making policy judgments—which are always difficult—far more challenging. With those challenges, the risk of large errors that carry significant ramifications for the economy is ... READ MORE >
CHART OF THE DAY: A do-over year for the Consumer Price Index
The inflation numbers for April released on Wednesday show the Consumer Price Index rising by 4.2% compared to April 2020, higher than the Bloomberg consensus forecast of 3.6%. The core CPI, which excludes the volatile food and energy components, rose 3.0%, up from the 1.6% year-over-year rate of ... READ MORE >