Surging prices: Key inflation measure hits a 39-year high
Due to the pandemic, there was a record 39-year high inflation in the past month. The U.S. consumer price inflation index rose 7% over the past year, and it was higher than the previous months. The biggest annual jump since February 1991 happened when inflation rose to 5.5% between last December to these past months, affecting prices especially for housing and auto industries. Although energy costs have declined, it is unlikely it will remain this way. Overall, prices have increased significantly, but it is still far from the highs of the 1980’s. Inflation is projected to last for a huge portion of 2022 and that will impact both consumers and businesses especially for those who are less able to meet the higher costs of living. As a business owner, you need to consider the implications that inflation would have on your business. Inflation can absolutely destroy a business, reduce cash flow, and stagnate growth especially under the circumstances of rising costs without the ability to increase prices. Hence, to better prepare for 2022, business owners should consider ways to overcome inflation by maintaining health cash flow and reasonable margins. Understanding and monitoring profitability are important especially in a rising cost environment. When was the last time you sat down and review the financial performance of your business? Do you need help? If you do, we are here to help. We utilize an interactive financial dashboard that provides useful adaptive insights to empower every business owner to understand their numbers in less than 60 seconds. Please reach out to us at 832 295 3353 and we are happy to assist.