The United States economy is booming. Unemployment is at its lowest level in more than 20 years, and the stock market has hit record highs. But while there are plenty of reasons to celebrate, one side-effect of this economic success story is that consumer prices are soaring even higher than before. The Consumer Price Index (CPI) rose 6.2% in October – the largest increase since November 1990 when it was 6.3%.
So what does this mean for your business? For many companies, it means trying to manage price increases on everyday items like gas, food and rent so they don’t get passed along to consumers in their retail pricing too quickly or dramatically! This is especially true for products that make up a significant chunk of your business like office space, insurance premiums or even staffing.
What’s the Big Deal? Why should you care about CPI? Well, because it can affect your business in several ways, some obvious and others more subtle than others. Since CPI measurements are used to set prices on government-backed loans, the higher the number goes the more expensive borrowing becomes. It can also impact your credit score and determine whether or not you have to pay taxes on a particular product or service. Beyond that, it’s used as a benchmark for many salary increases across different professions!
So what does all of this mean for you? As a business owner, it’s important to keep an eye on these figures so you can anticipate potential changes in your own prices. The most common place where companies are hit the hardest is with staffing. Bosses may have to increase salaries or consider giving bonuses to help boost morale and making up for rising prices of everyday goods.
Employees will be the first ones to tell you that they’re not thrilled when it comes to how much more their paycheck can buy. But in some cases, this may be an opportunity to show your employees (whether hourly or salaried) the value of bringing up price increases with customers, especially if yours is an industry with tight margins like retail!
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The United States economy is booming. Unemployment is at its lowest level in more than 20 years, and the stock market has hit record highs. But while there are plenty of reasons to celebrate, one side-effect of this economic success story is that consumer prices are soaring even higher than before.