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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (322)	7/17/2000 3:00:06 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 10065

US Businesses Raising Prices, Making Them Stick, NABE Says Washington, July 14 (Bloomberg) -- A third of U.S. businesses made up for higher costs by raising prices during the second quarter, the most to do so in five years, according to a survey of company economists. The poll of 127 members of the National Association for Business Economics found 33 percent of the businesses raised prices, compared with 29 percent in the first quarter. It was the largest share since 39 percent in the first three months of 1995. More than eight out of 10 companies that reported price increases said they stuck at least partially or fully, suggesting ``something has clearly changed in the ability of firms to raise prices over the last six months,'' said Diane Swonk, NABE's president and chief economist at Bank One Corp. in Chicago. Rising consumer prices worry central bankers, and Federal Reserve monetary policy-makers have raised the overnight bank lending rate six times since June 1999 to contain the economy's strength in a bid to reduce the risk that companies will be forced to raise prices to recoup higher materials and labor costs. Those pressures seem just as intense as three months ago. Sixty percent of companies reported paying more for materials, compared with 46 percent in the first quarter. And there's further indication higher costs will translate into higher consumer prices. Nearly half of the respondents said they expected to raise prices this year, while less than 10 percent expect to lower them. There are other signs that price pressures may be waning. While 84 percent of companies raising prices said they've succeeded in part or fully, three months ago 96 percent of companies said they succeeded in raising prices. Pressures from wage and salaries may be waning at the same time. The number of companies reporting higher wage costs fell to 40 percent from 54 percent in the first quarter. Meanwhile, the survey found there was little change in profits in the second quarter. However, 43 percent saw rising inventories, usually a sign of a slowdown, versus only 25 percent three months earlier. Jul/14/2000 6:00 ET