American businesses are swallowing the higher costs of tariffs rather than raising prices for consumers, new data suggests, providing relief on inflation and supporting the idea that the Federal Reserve’s focus should be on supporting the labor market.
The September purchasing managers’ indexes from S&P Global showed companies in manufacturing and services reported sharply higher input costs, which they primarily attributed to tariffs. But weak demand and fierce competition prevented most from raising prices, leading to the weakest goods inflation since January.
“Although tariffs were again cited as a driver of higher input costs across both…
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