Standard & Poor’s found that high inflation is weakening the US economy, and customers refuse to raise prices

Meanwhile, the flash US manufacturing index rose to a seven-month high at 59.7 from 58.5.

Key details: The cost of supplies for both service-oriented companies and manufacturers has risen at a record rapid pace due to “increases in the prices of fuels, materials and transportation”.

Although companies are still selling a lot of goods and services, they have also raised the prices they charge customers at the fastest pace ever. As a result, Standard & Poor’s found that this “reduced customer demand.”

Quick Surveys was renamed after IHS Markit was acquired by S&P Global. The results are based on surveys of senior executives responsible for purchasing supplies for their companies.

The Big Picture: On the surface, the so-called flash readings show a steady growth in the US economy, where demand is strong across the board. Numbers above 50 indicate growth and anything above 55 is seen as exceptional.

However, details of the surveys reflect widespread concerns about inflation and persistent shortages of supplies and employment. And executives are more concerned about the future, especially with the Federal Reserve’s move to raise interest rates.

I look ahead: “Many companies continue to report a tailwind of pent-up demand from the pandemic, but companies are also facing growing challenges from rising inflation and cost-of-living pressure as well as ongoing supply chain delays and labor restrictions,” said Chris Williamson, chief business officer. Economist at S&P Global.

“These headwinds, combined with heightened concerns about the economic outlook and monetary policy tightening, mean that business confidence about the outlook fell sharply in April.”

market reaction: Dow Jones Industrial Average DJIA,
-2.82%
and the S&P 500 SPX,
-2.77%
It fell in Friday’s trading.