American companies are sounding the alarm on inflation. The Financial Times reports:
Investors are fretting over inflation. Scores of US companies are saying they are right to.
A growing list of businesses are warning that supply-chain bottlenecks, increasing raw material costs and higher labour expenses are beginning to bite.
Manufacturing behemoth 3M has flagged rising air and freight costs to ship its goods, while Walmart has warned on the congestion in US ports. Mobile home manufacturer Legacy Homes and Williams-Sonoma, the purveyor of Breville espresso machines and Wüsthof knife sets, have seen an uptick in wage costs. And Barbie Doll-maker Mattel has warned on the rise in plastics prices, which were exacerbated by the winter storm in Texas that took petrochemicals plants offline.
“Costs are going up everywhere,” said Ted Doheny, chief executive of packaging maker Sealed Air. “It’s DefCon 4 [for] us right now. It’s a big deal.”
These first flickers of inflation — and the fact that many S&P 500 companies say they are responding by raising their own prices — have fed a debate among investors as the US economic recovery accelerates. Are these a signal that the kind of chronic inflation long ago tamed by the US central bank could be about to roar back?
“People are thinking it’s transitory, or maybe hoping it’s transitory,” said Peter van Dooijeweert, managing director of multi-asset solutions at Man Solutions. “Because no one really knows what else to do.”
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