Inflation has risen again in America.

[Sunbiz1]

Originally Posted by Coldjensens

Maybe they are just playing with the numbers to make things look the way they want them to look.

That's pretty much all they do.

[Coldjensens]

Originally Posted by Morganist

Inflation is measured in an Index, which only contains certain goods. Most goods are not included in the Index that is used to calculate inflation, which means it is only reflective of certain products. You are describing the cost of business production goods, which is not included in the main inflation index although it might have its own inflation index. In any event the overall wider rate of inflation might be higher or the figure might be lagging in the time from the rising cost of production to the rising cost of purchase that might hit in a month or two. If you pass on the rising cost of production to the consumer then you may see inflation in coming months. Are you going to increase your prices to compensate yourself against the cost of production? If you are then the rate of inflation will increase in the next couple of months.

We are a construction company (mostly management). We build big things like factories, hospitals, .and data centers. Price increases are automatically passed through. If price escalation (inflation) does not pass through, then we have to include a significant contingency to cover escalation. Sometimes recently, we just will not take a job if the price escalation does not pass through. We are getting more work than ever before. so we can be picky about what jobs we take right now.

Some prices are going crazy, especially steel, but everything is going up. A complex building uses thousands of components and there is nothing that is not skyrocketing. This has been the case for nearly two years. The last eight months have been especially wild. Trade labor is mostly union, so price increases generally only occur when contracts renew. However show up payments and signing bonuses are usually included in overhead or general conditions so that is getting passed through. Subcontractors are overwhelmed and getting really picky about what jobs they will take on. They are also getting creative about ways to try to recover cost increases. Some jobs get cancelled because the prices come in so much over the budgeted amount, but there is still more work available than anyone can do. If you are going to make things, you need a factory, no matter the cost.

LEad times are also going crazy. Some items that used to take 2-3 weeks to fabircate now take 10-12 weeks. It is getting hard to maintain schedules.

[Morganist]

Originally Posted by Coldjensens

We are a construction company (mostly management). We build big things like factories, hospitals, .and data centers. Price increases are automatically passed through. If price escalation (inflation) does not pass through, then we have to include a significant contingency to cover escalation. Sometimes recently, we just will not take a job if the price escalation does not pass through. We are getting more work than ever before. so we can be picky about what jobs we take right now.

Some prices are going crazy, especially steel, but everything is going up. A complex building uses thousands of components and there is nothing that is not skyrocketing. This has been the case for nearly two years. The last eight months have been especially wild. Trade labor is mostly union, so price increases generally only occur when contracts renew. However show up payments and signing bonuses are usually included in overhead or general conditions so that is getting passed through. Subcontractors are overwhelmed and getting really picky about what jobs they will take on. They are also getting creative about ways to try to recover cost increases. Some jobs get cancelled because the prices come in so much over the budgeted amount, but there is still more work available than anyone can do. If you are going to make things, you need a factory, no matter the cost.

LEad times are also going crazy. Some items that used to take 2-3 weeks to fabircate now take 10-12 weeks. It is getting hard to maintain schedules.

From your description it sounds like inflation will rise in the next couple of months to compensate the increased cost of production, which would make it cost push inflation. If you are interested about reading on the issue of types of inflation and how monetary and fiscal policies determine prices then you can read my book below.

The book is Modern Applied Macroeconomics it is available to read for free in Scribd document format. The part you want is Chapter 7 on page 73 onwards.

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The rest of the paper explains how pension saving can be increased to control inflation instead of increasing the interest rate, which was devasting in the UK before they starting using pension economic control about ten to fifteen years ago. If you want to see how successful pension economic control is then look at the second Scribd document down on the linked page below.

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This has been successful in the United Kingdom and I have sent letter and an article to the American Ambassador to the Uinted Kingdom to present the work to the USA. The letter and the article are available to read below.

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