Below are comments about the Federal Reserve Beige Book released Wednesday, June 3 by John Canally, Chief Economic Strategist for LPL Financial.
Federal Reserve Beige Book Comments
- Barometer +92 in Mar vs +47 in Apr. Highest reading since Dec ’14, pre Q1 distortions (Port, weather, etc)
- Weather (16 in Jun vs 71 in Apr), oil (32 vs 46) and ports (16 vs 16) faded as concerns.
- … while dollar/strong dollar (30 vs 31) remained as a key concern
- 112 mentions of “inflation words” – labor market type words (wage/skilled/shortage/widespread/rising vs 106 in April and 98 in 2014 and jusrt 80 in ’11-13
- Takeaway is that slack in economy is pushing up wages and prices
- Comment on wages prices:
- June: “Wages rose slightly. Prices were stable or ticked up” ….
- April “Districts noted modest upward pressure on wages and overall prices”
Turning Pricing Power Into Profit
Company managements looking to achieve earnings growth often default to cost cutting, stock buyback, accounting gimmicks and other methods. But there is another way. More often than not, managements overlook pricing as a driver of earnings growth. Pricing power can be an effect way of boosting a company's bottom line. Read More