US Companies Are Going To Raise Prices And Pass On Cost Pressures.
NABE's survey shows that more and more American companies plan to raise commodity prices and reduce labor costs to offset the loss of profits caused by rising raw material costs.
The survey shows that in the next quarter, the number of American companies with a significant increase in prices is 4 times the number of enterprises with reduced prices.
90% of employers surveyed said they would cut staff salaries in the next six months.
The report raises the concern that an accelerated increase in cost expenditure will lead to more severe inflation and lead to a labor market depression.
According to the survey, 71% of the surveyed enterprises indicated a significant increase in cost in the previous quarter, which reached the highest level in 1994.
"The growth of raw material costs and other non labor inputs is a big problem, which has dragged down corporate profits."
Ken? Simonsen said.
Based on the first two quarters of this year, few companies are optimistic about the outlook for profits in 2008.
You know, the survey took place between June 19th and July 10th, so respondents did not have the opportunity to take into account the recent crisis in the two largest mortgage giants of the United States, Fannie Mae and Freddie Mac, causing financial market turbulence.
The consumer price report released last week by the US Department of labor pointed out that food prices in the United States increased by 5.3% in the year to June.
After adjusting for inflation, the wage level of Americans is still 2.4% lower than that of the previous year from July to June.
According to the labor department, the employment rate in the United States is decreasing every month in 2008.
Layoffs and wage increases have not kept pace with inflation. Economists worry that consumer spending, which accounts for the largest share of the US economy, will go down further this year.
NABE's survey also showed that US investment in the last quarter was equally weak. Only 27% of the respondents said they would increase investment, build factories and add equipment in the coming year.
At the end of 2007, the figure was 40%.
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