The price of the commodity is generally determined by looking at the demand of the product, and currently, the US has higher demand but a stagnant job market due to which any big companies in the country are raising their products prices. Many companies have to pay a considerable amount of salaries or wages to their workers because of the recent new minimum wage payment acts and now is the perfect time for these companies to recover all of that cost and hence they’re charging huge amount of money to the customer. However, there could be many other reasons also behind the increase in the prices of consumer goods such as high borrowing, high production cost, slow growth rate. If the companies based in the US are charging its customers for these reasons, then they’re indirectly sending a mixed signal of inflation in the country.
So far companies in Airline, transport and consumer products sector has got affected because of the ongoing political situation. Due the government shutdown majority of the companies have lost millions of revenue and now since the consumer power has increased, they have decided to raise the prices of commodities also. Federal reserve’s whose only object is to keep the inflation low might not be achieved its target if the situation goes on like this for the next few months. The raising prices indicate that the country might be facing the problems of inflation in the future since many workers are not getting any job and due to the shutdown situation, the federal employees haven’t got paid from last three weeks.
Many big companies from the primary sector have stated various reasons for raising the prices of their product, but one thing is sure that the consumer is paying the higher prices for the daily commodity which indicates the signs of inflation.