Bidenflation Rises Again to Record High in Mid-Atlantic Manufacturing Survey

Manufacturers in the mid-Atlantic upped their expectations for price increases six months from now, a survey from the Federal Reserve Bank of Richmond showed Tuesday.

Prices are expected to be rising at an annualized rate of 5.8 percent six months from now. That’s the second highest on record, following September’s 5.83, and an acceleration from October’s 5.73 percent. The upward movement in expectations confirms other signs that inflation appears to be accelerating as the U.S. heads into the year end, rather than slowing as Biden administration and Federal Reserve officials predicted.

Expectations for prices paid dipped to hikes at a 6.33 percent rate. That’s below the 6.49 percent rate a month ago but still the third-highest on record.

Manufacturers report that the prices they are paying for raw materials are rising at a 12.28 percent annual rate, down slightly from 13.03 percent but still the third-fastest pace on record.  They report hiking the prices they charge for finished goods at a 7.59 percent rate, the fourth-fastest on record following three consecutive months of prices at or near record highs.

The Richmond Fed’s monthly manufacturing survey investigates business conditions in the Fed’s Fifth District, which is comprised of the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

The survey indicates that manufacturers continue to be plagued by shortages. Many companies said inventories were too low and the index for finished goods inventories fell to its lowest level on record. Vendor lead times and backlogs of orders continued to grow.  And while increased employment and wages in November,  they struggled to find workers with the necessary skills. Survey respondents expected these trends to continue in the next six months.

The composite index ticked down from 12 in October to 11 in November but remained in what the Richmond Fed said is “expansionary territory.” All three component indexes — shipments, new orders, and employment — continued to reflect growth, according to the regional Fed.