Inflation fears of US companies are rapidly receding

The CEO of Berkshire Hathaway-owned (BRK-A, BRK-B) See’s Candies is finally seeing some price easing that helps bring the brand’s storied chocolates to market.

Sugar doubled [in price]. Sugar is more expensive in the USA than anywhere else on the planet. It is a type of chart that is controlled by the price. See’s Candies CEO Pat Egan explained on Yahoo! Finance Live (video above), reports that Butter is up 100% in the past year. “I think we’re actually, I hope, at the peak of that.”

Egan isn’t alone in the C-suite community breathing a huge sigh of relief after a grueling two-year stint.

Of all the S&P 500 companies that reported first-quarter earnings from March 15 to May 11, new FactSet research finds that 278 described “inflation” on their earnings calls. While that’s higher than the five-year average of 211, the number is the lowest among S&P 500 companies going back to the second quarter of 2021.

It also marks the third consecutive quarter in which the number of S&P 500 companies citing the term “inflation” declined on a quarterly basis.

By sector, financials and industrials boast the highest number of companies reporting inflation in first-quarter earnings calls. The fewest inflation signals came from telecom services and utilities.

While top executives may feel better about the inflation outlook, mixed price readings recently continue to worry Wall Street.

Executives breathe a sigh of relief on inflation.

The consumer price index for April rose 4.9% year-on-year, the lowest level since April 2021, as food prices fell. The headline increase represents a sharp slowdown from a peak of 9.1% last June.

But prices continued to hold above the Fed’s 2% inflation target.

And “core” inflation – which excludes food, energy and shelter – increased by 0.4% in April. That was a faster pace than the 0.3% increase in the gauge in March.

Meanwhile, the Producer Price Index (PPI) for April showed a year-on-year increase of 2.3%. Similar to the consumer price index, this was the slowest annual increase since 2021.

The mixed readings fueled fears that the Federal Reserve may continue its course of rate hikes, surprising the stock market in stall mode.

“Inflation has been higher than we’d like, but let’s try to stabilize prices without causing any unnecessary recession,” Chicago Fed President Austin Goolsby told Yahoo Finance’s Jennifer Schonberger.

PHOTOS ARE DISTRIBUTED FOR PEOPLE - Berkshire Hathaway's Warren Buffett tries to lift a replica of a giant candy lollipop, Saturday, May 3, 2014, at Berkshire Hathaway's annual shareholder meeting, in Omaha, NE (Photo by Dave Weaver/Invision for See's/Images) A.P.)

PHOTOS ARE DISTRIBUTED FOR PEOPLE – Berkshire Hathaway’s Warren Buffett tries to lift a replica of a giant candy lollipop, Saturday, May 3, 2014, at Berkshire Hathaway’s annual shareholder meeting, in Omaha, NE (Photo by Dave Weaver/Invision for See’s/Images) A.P.)

See’s Candies CEO Egan was forced to push prices up for consumers during the inflationary explosion.

“We definitely raised prices. Every company should do that. We have to cover our costs. And the cost of our components, for example, has gone up 30% year-over-year. So we have to make sure we cover that and labor costs.”

But with inflation subsiding, that box of chocolates might be a few dollars cheaper at Berkshire’s annual meeting in May 2024.

Brian Suzy He is the Executive Editor of Yahoo Finance. Follow Suzy on Twitter @employee and on linkedin. Deal tips, mergers, activist positions, or anything else? Email [email protected]

Click here for the latest stock market news and in-depth analysis, including the events that move stocks

Read the latest financial and business news from Yahoo Finance

#Inflation #fears #companies #rapidly #receding

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top