Businesses Preparing for Higher Costs in 2012

Business executives are expecting their costs to increase again next year. But they may not be able to pass those costs along to their customers.

Good for the Federal Reserve, perhaps a problem for profit margins.

Within their monthly surveys, the Fed banks of New York and Philadelphia added special questions about cost expectations for 2012. Although each bank asked slightly different questions, the results were similar. Businesses expect to pay more for labor and supplies, but energy inflation should ease.

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