The globally integrated nature of firms in the U.S. economy has resulted in an expected increase in the overall inflation rate relative to what was expected last year at this time. Roughly 82% of the service firms and 86% of the manufacturing firms surveyed reported some use of imported inputs. The higher the firm’s import share, the steeper the expected cost increase for the coming year.
According to the Federal Reserve Bank of New York:
• The expected cost increase for firms with no imports is about 5%
• The expected cost increase for firms that import all their inputs is about 9%
• For manufacturing firms, the average annual price increase was 3.2% for both 2023 and 2024. This figure is expected to rise to 5.4% in 2025.
As businesses prepare for 2025, tariffs are clearly front and center in their planning. Even so, expectations for longer-term inflation remain at 3%, the same figure firms were expecting this time last year. In short, firms are not expecting the recently enacted tariffs to affect the U.S. economy’s long-term inflation rate.
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As always, please reach out to your Private Wealth Manager with any questions or concerns. Thank you for allowing Curran Wealth Management to assist you in meeting your financial goals.
Sincerely,
Tom Curran
Founder & Co-CEO
Curran Wealth Management
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