Inflation Stings Restaurants Even as Consumer Prices Appear Tame

Tuesday, 19 Aug 2014 08:21 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
While many economists say inflation isn't a problem now, try telling that to restaurant chains.

Consumer prices rose 2.1 percent in the 12 months through June. And the Federal Reserve's favored inflation gauge, the personal consumption expenditures price index, gained only 1.6 percent during that period. That's below the Fed's target of 2 percent.

But Red Robin Gourmet Burgers reported Thursday that its profit margin dropped 1.3 percent in the latest quarter thanks to higher food and beverage costs, according to CNBC.com.

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

And Noodles & Co. said its profit margin fell 2 percent in the second quarter because of increased costs. Many other food retailers are saying the same thing.

"Inflation remains a key concern for management," Goldman Sachs strategist David Kostin wrote last week in a research note obtained by CNBC.com.

"Companies [have] noted the potential long-term impact of rising costs on margins despite hedges that reduce the near-term impact on profits."

Wholesale food prices climbed 0.4 percent in July from June and 3.7 percent in the 12 months through July.

Laura Rosner, U.S. economist with BNP Paribas, is one who isn't worried about inflation.

"The economy and the recovery remain on track, neither too hot nor too cold," she told Bloomberg, commenting on the latest consumer price figures.

The Fed "can continue with accommodative policy," she said.

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

Related Stories:

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

El-Erian: Global Economic Slowdown Remains a Concern

Saturday, 25 Oct 2014 11:55 AM

While the U.S. stock market may have rebounded sharply from its recent plunge, that doesn't mean all is hunk dory with t . . .

Kudlow: Obama's Head Will Spin From New Conservative Agenda

Friday, 24 Oct 2014 21:35 PM

The vast majority of political journalists , and I include some of my conservative colleagues , are missing a very big s . . .

Stocks Rise on Earnings, S&P 500 Caps Best Week Since 2013

Friday, 24 Oct 2014 17:09 PM

U.S. stocks rose, with the Standard & Poor's 500 Index capping its best week since 2013, as companies from Procter & Gam . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved