Will inflation thwart the US economic recovery?

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Will inflation thwart the US economic recovery?

Corporate America is poised to deliver the best earnings season in years, raising hopes of a swift economic recovery. But executives are flagging one key pressure point during analyst calls: rising prices.

For months, Wall Street investors have been fretting over inflation as the nation’s economy reopens from the pandemic. On Wednesday, the US labour department’s core consumer price index for April could provide the clearest evidence yet that those price pressures could become a mounting threat to the recovery.

For March, core CPI, which excludes the more volatile prices of food and energy, remained relatively tame, at a 1.6 per cent year-on-year increase. But economists polled by Bloomberg expect that number to jump to 2.3 per cent for April, which would be the highest level since the coronavirus pandemic took hold in the US.

“Near term, it’s clear demand is going to be running…

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