As inflation continues to heat up—a new report from Goldman Sachs cautioned that rates may not cool off this year as many had hoped. “The inflation picture has worsened this winter as we expected, and how much it will improve later this year is now in question,” Goldman Sachs economists wrote.
A measure of inflation that the Federal Reserve watches closely accelerated again in February, hitting a new 40-year high and speeding up on a monthly basis as food and energy prices climbed sharply. Now, nearly nine in 10 adults say they are at least somewhat concerned about inflation, according to a survey conducted recently by the online research firm Momentive for The New York Times.
With the fear of inflation weighing on people’s view of their finances and the economy overall, only 14 percent of employed respondents in the survey said they had received a raise significant enough to keep up with inflation.
At the same time, Goldman Sachs noted the widest gap between available jobs and workers in postwar US history. “The one-two punch of high inflation expectations and a strong jobs market threaten to ignite a moderate wage-price spiral,” Goldman Sachs said, somewhat reversing its previous assessment that there is little risk of such a spiral.
While companies scramble to deal with increasing commodity prices, supply constraints and higher wages caused by labor shortages, a recent report by Harvard Business Review says that cutting expenses is a vital part of how companies can weather the storm.