Home Economy US prices continue to rise

US prices continue to rise

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US prices continue to rise

Companies in USAfrom manufacturers cars before hotelscontinue to sacrifice sales volume in favor of high prices, a tactic that will test efforts federal bank USA to tame it inflation. Ford announced this month, for example, that it is committed to keeping prices high, even if that means fewer cars rolling off the assembly lines. Marriott International, in turn, focuses on increasing the cost of a room per night, mainly for corporate clients.

At the same time, Southwest Airlines is among the companies recording record revenues at a time when limited flight capacity is pushing up ticket prices.

With the approach of the peak tourist season, this dependence on price dynamics will not go anywhere. That could be evident in next Wednesday’s inflation data, which economists polled by Bloomberg say will remain flat at 5 percent in April after falling for nine straight months. Car prices are close to record highs, Cox Automotive says monthly new car fees in March amid rising period interest ratesreached $754.

This is one sixth of the average net income of a family household. Price increases are expected to become more pronounced as automakers convert their fleets to expensive electric vehicles.

Unlike Ford, which is phasing out production on its own initiative, some airlines don’t fly full planes because they don’t have enough trained pilots and face delays in acquiring new equipment.

Southwest, for example, said in March it could fly 8 percent more if it had enough pilots. Limited aircraft capacity, combined with increased demand, is allowing industry companies to charge higher prices, especially for international flights. Travel to Europe averages close to $1,032, up 35% from last year and 24% above pre-pandemic levels, with airfare this summer hitting its highest level in five years, according to search engine Hopper . years.

Meanwhile, the hospitality industry has changed its strategy in such conditions. According to STR, a company of the CoStar Group, hotel prices in the US rose more than 10% in the first quarter of this year compared to last year. Over the same period, of course, housing rentals rose by only about 6%.

Homeowners have started to run their hotels with fewer rooms available because it costs less as there are fewer cleaning rooms.

“During the pandemic, the industry lost a lot of workers but gained a lot of pricing power,” said Jan Freytag, director of hospitality industry analysis at CoStar.

Author: MICHAEL SASSO, MARY SLANGENSTEIN, PATRICK CLARK and KEITH LAING/BLOOMBERG

Source: Kathimerini

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