When inflation hits the PB jar [Enes Evren/E+ via Getty Images]
Charmin, Tide, Gillette, Swiffer... Your pandemic grocery list = Procter & Gamble's pandemic winners list. In October, the consumer packaged goods giant dropped its largest quarterly sales increase in 15 years (thanks to obsessive sanitizing). Last quarter, sales jumped 5% — the slowest increase in three years. But the headliner from P&G's earnings was price hikes.
Your PB&J is getting pricier... P&G isn't the only consumer giant hiking prices — we're seeing the first widespread increases since 2018. As supply chain shortages and inflation raise prices, CPG giants are passing on the costs to consumers.
Prices are fueling inflation concerns... but they may be overblown. People are worried that the purchasing power of the dollar could decrease, and prices could rise. Trillions of $$$ have been pumped into the economy over the past year, boosting spending (and sometimes, prices). As "revenge spending" soared in March, consumer prices jumped 2.6% from 2020 — the largest rise since August 2018. But Fed Chairman Jerome Powell said that one-time price increases will likely have only short-term effects on inflation (which has been hovering at a tame ~2% since 2008). While we're seeing prices rise faster in some sectors, like food, the Fed expects overall inflation to stay in check.