A recent survey reveals growing inflationary pressures in the U.S. manufacturing sector, with firms facing higher input costs and planning further price increases. The Philadelphia Federal Reserve’s August manufacturing index shows that prices paid by producers reached their highest level since May 2022, signaling that inflation may persist despite broader economic stabilization efforts. n nManufacturers in the Delaware Valley region—covering parts of Pennsylvania, New Jersey, and Delaware—reported rising expenses for raw materials and are passing these costs onto consumers. This shift reflects a broader trend across industries, where businesses are increasingly transferring tariff-related and supply chain-driven cost hikes to end users. According to Chris Williamson, chief business economist at S&P Global Market Intelligence, inflationary pressures are now at a three-year peak as more companies adjust their pricing strategies. n nLooking ahead, firms anticipate raising prices by an average of 4.1% over the coming months, up from earlier projections. At the same time, expected wage increases have dipped to 3.5%, down from 4.0% in the previous quarter, suggesting a widening gap between rising living costs and income growth. This imbalance could place additional strain on households, particularly if consumer prices continue to climb. n nSeparate data from S&P Global’s national survey indicates that both manufacturing and services sectors expanded in August and added jobs. However, stronger demand has also enhanced firms’ ability to raise prices, reinforcing inflationary momentum. While hiring remains strong, the combination of slowing wage growth and accelerating prices may erode purchasing power for many workers in the near term. n
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Economic Concerns Mount as Survey Shows Manufacturers Expect Price Pressures
Things could be getting tougher for workers in the coming months, with prices rising and wages falling, according to a new survey of manufacturers. n nThe Philadelphia Federal Reserve’s monthly manufacturing survey for August showed that firms were facing higher prices for materials and, in turn, were raising prices for their finished products. Moreover, manufacturers in the district expect to start charging more and paying less, a reversal from just three months ago. n nAn index of prices paid by manufacturers rose to its highest reading since May 2022, according to the survey of manufacturing firms in Delaware and parts of New Jersey and Pennsylvania. The survey highlights how businesses across the economy are beginning to see tariff effects on prices they pay, and are likely to pass them on to consumers, economists said. n n“Companies have consequently passed tariff-related cost increases through to customers in increasing numbers, indicating that inflation pressures are now at their highest for three years,” said Chris Williamson, chief business economist at S&P Global Market Intelligence. n nPrice Pressures in the Pipeline? n nManufacturers indicated that more price pressures could be in the pipeline. n nFirms said they expect to raise their prices by 4.1%, a larger projection than when they were asked the same question in May. These employers said that wages would go up by 3.5% over the same period, below the 4.0% from last quarter. n nMeanwhile, a national industry survey by S&P Global showed that while the manufacturing and services industries both showed growth and increased hiring in August, prices also moved higher. n n“While this upturn in demand has fueled a surge in hiring, it has also bolstered firms’ pricing power,” Williamson said.