Businesses facing increase in cost, struggling to find workers: Federal Reserve report
Businesses are experiencing an increase in costs, specifically on goods used to make their products, while they are giving out higher wages and other incentives to make employees return to work, the Federal Reserve reported on Wednesday.
The central bank claimed in its periodic “Beige Book” survey of activity across its 12 districts that economic growth surged at a “moderate pace” from early April to late May.
Companies claimed that the rise in vaccination rates and ease in restrictions put in place to battle the Covid-19 pandemic also helped with growth.
However, they also mentioned the increasing inflation pressures coming from wages and the price to purchase input goods they need to operate. Those costs, they said, will lead to an increase in prices.
“Strengthening demand … allowed some businesses, particularly manufacturers, builders, and transportation companies, to pass through much of the cost increases to their customers. Looking forward, contacts anticipate facing cost increases and charging higher prices in the coming months, the Federal Reserve report said.