Inflation is once again intensifying across the US economy, with price increases affecting everything from housing to grocery staples like eggs. This renewed inflationary pressure is evident across numerous economic indicators, including input costs, wage growth, and inflation expectations.
The causes mirror those of the initial pandemic inflation surge: supply-demand imbalances and labor market constraints. Additionally, the Trump administration’s planned tariffs and immigration policies are creating significant upside risks to inflation forecasts.
Businesses are reporting the highest input costs since 2022, with raw materials like lumber and steel becoming more expensive. Consumer inflation expectations have reached their highest level since 1995, which could further enable price increases as companies pass costs to consumers.