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Ny Times - Companies Warn That Higher Prices Are Looming

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http://www.nytimes.com/2011/02/15/business/15prices.html?_r=1&ref=business

A package of Oscar Mayer cold cuts. A pair of Nine West boots. A Whirlpool washing machine.

By the fall, people will most likely be paying more for each of them, as rising prices hit most consumer goods, say retailers, food companies and manufacturers of consumer products.

Cotton prices are near their highest level in more than a decade, after adjusting for inflation, and leather and polyester costs are jumping as well. Copper recently hit its highest level in about 40 years, and iron ore, used for steel, is fetching extremely high prices. Prices for corn, sugar, wheat, beef, pork and coffee are soaring. Labor overseas is becoming more expensive, meanwhile, and so are the utility bills to keep a factory running.

“There are cost pressures from virtually everywhere,” said Wesley R. Card, the chief executive of the Jones Group, whose brands include Nine West and Anne Klein. After trying to keep retail prices flat or even lower during the recession, Jones says prices for its brands will climb 15 to 20 percent by autumn.

When commodity prices started to rise last summer, many manufacturers and retailers absorbed the costs, worried that shoppers would not pay higher prices during the competitive holiday season or while the economy was still fragile.

Many big companies, including Kraft, Polo Ralph Lauren and Hanes, say they cannot hold off any longer and must raise prices to protect some profits.

Whether shoppers will pay is unclear. “Consumers are not exactly in the frame of mind or economic circumstances to say ‘Oh, pay whatever they ask,’ ” said Joshua Shapiro, chief United States economist at MFR Inc. “There’s going to be pushback.”

Economists say the increases may eventually show up as inflation, though they are not yet projecting rates that would set off alarms. Despite some fears, inflation has been extremely low, at a rate of just 1.4 percent annually in December. Data for January will be released Thursday, but economists expect inflation will run about 2.5 percent this year.

Some do see the creeping signs of higher inflation, and warn that the Federal Reserve will need to raise interest rates or at least stop pumping more money into the economy. Others argue that such moves would choke off economic growth sorely needed to get companies hiring again.

For consumers, higher prices in stores means there will be a little less extra cash to spend. For companies, profits may be squeezed, making them a little less likely to invest in equipment or to hire aggressively.

“One has to think about these higher prices not as a reason for economic activity to get derailed,” said John Ryding, chief economist at RDQ Economics, “but as a reason why the recovery is slower than might otherwise be the case.”

Clearly there are global inflation pressures, but is this VI ramping to get people to start spending before prices "increase"? The trouble is with declining disposable incomes higher prices will probably translate into lower sales creating a even stronger negative recovery.

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http://www.nytimes.com/2011/02/15/business/15prices.html?_r=1&ref=business

Clearly there are global inflation pressures, but is this VI ramping to get people to start spending before prices "increase"? The trouble is with declining disposable incomes higher prices will probably translate into lower sales creating a even stronger negative recovery.

Higher prices - smaller shipment orders, lower profits, less stock, more lost sales opportunities, higher demands on fixed costs, less money for new stock, smaller purchases, less profit - on and on.

The public are going to choke on this inflation and vomit up the banks again.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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