May 23, 2024 15:50 GMT
Mixed Pricing Power Developments In Kansas City Fed Mfg Survey
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- Today’s Kansas City Fed manufacturing survey offers some further signs of a softening in the ability of firms to pass on higher costs.
- It follows a softening in those with greater ability to pass on costs in yesterday’s Atlanta Fed BIE, lending support to comments in the April Beige Book that “Another frequent comment was that firms’ ability to pass cost increases on to consumers had weakened considerably in recent months, resulting in smaller profit margins.”
- However, what’s interesting in this latest KC Fed survey is that whilst the share of firms only able to pass through 0-20% of cost increases has increased strongly from 27% a year ago to now 36%, there is still a significant share who maintain strong pricing power with 27% able to pass on 80-100% of their increases (actually up from 25% a year ago).
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