Federal Reserve officials on inflationary trends, labor challenges impacting small business, reduced optimism among business economists, fewer holiday shopping details, more willingness to raise prices, and an effort to secure a Connecticut disaster declaration are among the top business news items this morning.
National
The Federal Reserve is taking a more cautious approach on inflation, with officials saying they still expect higher prices to moderate but are planning what to do if they persist. Federal Reserve Chairman Jerome Powell says he anticipates that supply chain issues and upward pressure on wages will persist into 2022, contributing to inflation.
Business trends
Labor challenges are impacting small businesses as well as large ones, according to a recent Insider report. Companies with smaller payrolls have been cutting hours and forgoing projects due to insufficient staff, resulting in lower revenues.
Business economists expressed less optimism about next year’s growth in a recent survey. The National Association for Business Economics found that while two-thirds of respondents expect the U.S. economy to grow 3 percent to 5.9 percent, 28 percent expect slower growth – an increase of eight points from a July survey.
With supply chain bottlenecks causing inventory challenges for retailers, stores are less likely to offer discounts, sales, and other deals common for the holiday season. Similar to last year, retailers are also pushing an earlier start to the holiday shopping season and are less likely to emphasize major shopping promotions such as Black Friday.
Many companies are saying they plan to continue increasing prices for their products to keep pace with inflation. Businesses have sometimes sought to trim costs or reduce profit margins to keep prices stable, but have often found that customers are willing to absorb the higher costs rather than change their spending habits.
Connecticut
Governor Ned Lamont says he is seeking a major disaster declaration for parts of Connecticut for damages caused by the remnants of Hurricane Ida in September. If approved, municipalities and individuals would qualify for disaster assistance through the Federal Emergency Management Agency.
