Dozens of publicly traded companies in the U.S. have issued warnings of rising Inflation due to bottlenecks in the supply chain, rising raw material costs, and the beginning of higher labor costs.
Manufacturing giant 3M said air and land transportation costs are rising, while Wal-Mart stressed congestion at U.S. ports. Mobile Home and housewares manufacturers Legacy Homes and Williams-Sonoma both said wage costs were up, and Mattel said plastic prices were up. The packaging industry Sealed Air CEO Duhini said, “All costs are rising.
These initial signals of rising inflation, as well as many S&P 500 component companies said they will raise product prices to respond to rising costs, coupled with the accelerating recovery of the U.S. economy, has led market experts to discuss whether inflation back again.
Experts pointed out that people think this is only a transitory phenomenon, or hope so, because no one knows what to do otherwise.
Central banks and investors are expected to accelerate the rise in inflation this year, because many governments to strongly stimulate economic recovery, as well as the Epidemic ebb will have “retaliatory” consumer demand. Last week, the market for the next 10 years, the average annual inflation rate is expected to 2.36%, a high point in 2013, the Federal Reserve Board (Fed) will also be the end of this year, personal consumption expenditures (PCE) core deflator annual rate of increase forecast, from the current 1.4%, to 2.2%, while three months ago the forecast value of 1.8%.
Aluminum, copper, Crude Oil and lumber prices have risen rapidly in recent months, with lumber prices approaching record highs and polyethylene prices rising about 20% from the fourth quarter of last year to mid-March this year; surveys by regional federal reserve banks show that manufacturers are generally reacting to the next six months of rising raw material prices.
Household goods manufacturer Legacy Homes founder Hougerson pointed out that “every raw material we purchase is increasing in price; and in order to recall workers, we will also raise the hourly wage by $1. It is not clear to the business community whether prices will return to flat as raw material production increases.
Fed chairman Bauer so far remains low-key response to rising prices, predicting that rising inflation is only transitory and “neither too big nor lasting. But some investors are still reluctant to accept Bauer’s view.