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US: The Coming Battle between Profits and Prices - "Pricing power is rising, but so are costs, and that will soon squeeze margins"
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US: The Coming Battle between Profits and Prices "Pricing power is rising, but so are costs, and that will soon squeeze margins" The article states the fact that due to the latest sings of a stronger economy is leading to inflation threat worries. Lately companies are dealing with a generalized rise in pricing power but, at the same time, they are facing an increase in cost of the inputs due to inflation. For example the prices for unfinished intermediate goods (INPUTS) have gone up by 7.8% from a year ago. But the prices of finished goods (OUTPUTS) have gone up by only 1.8%. On the other hand, but also affecting the input prices is the labor rises. Companies are facing higher bills for labor since the job market in U.S. is growing and is expected to increase during the following year. The consequence of the last mentioned situation is that there are...
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