Tariffs Are Pushing Prices Higher and Consumers Are Feeling the Hit

• President Donald Trump’s tariffs are pushing inflation generally higher as companies are caught between absorbing the costs or passing them onto customers, according to a Federal Reserve report on Wednesday.
• The central bank’s periodic Beige Book report, which is published eight times a year, generally at about six-week intervals, categorised overall economic growth as having “changed little” since the last report on Sept. 3. Labour markets “were largely stable” as demand was “muted” for most of the Fed’s 12 districts.
• When it came to prices, though, Trump’s duties implemented in April and then staggered through ensuing months showed an impact. “Prices rose further during the reporting period,” the report stated. “Tariff-induced input cost increases were reported across many Districts, but the extent of those higher costs passing through to final prices varied.”
• In some cases, firms held prices unchanged to stay competitive and to appease inflation-sensitive clients. However, some businesses said they were “fully passing higher import costs along to their customers.”
• The release comes amid a dearth of relevant economic data due to a government shutdown entering its third week. Key providers such as the Labour and Commerce departments are largely closed due to the impasse.
• However, Bureau of Labour Statistics workers have been called back to release the pivotal consumer price index report used both as an inflation gauge and to index cost of living adjustments for Social Security recipients. The CPI reading, which normally would have been released Wednesday, will come out Oct. 24, the last inflation reading the Fed will get before its policy meeting Oct. 28-29.

 (Source: CNBC)