Rising inflation rates can impact small businesses in the US

New Ideas in MarketingEssential news for marketers, summarised by YouGov
January 11, 2022, 2:11 AM UTC

Product demand, rising production costs, supply chain breakdowns, and shifting property prices, have contributed to inflation.

US Inflation rates are surging, and it pushed hourly wages up 5.1% in 2021, according to Expansivity’s recent report. This resulted in lower unemployment rates, and change in investment preferences, lower saving rates, and increased interest rates.

With inflation being measured by the Consumer Price Index (CPI), higher inflation rates can impact small businesses, unless consumers income increases in tandem. US’ CPI grew at 6.8%.

In Q3, 2021, US recorded the eighth-highest inflation rate. Prices for used cars climbed 29.7% in 2021, followed by food (8.3%) and healthcare (6%). By reducing the amount of money in circulation, decreasing bond prices, and rising interest rates, the central bank can keep inflation in check.

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