How Is Inflation Impacting My Business in 2024?

Inflation is always a hot topic for both business leaders and consumers. The COVID-19 pandemic led to an aggressive response by the government and the Federal Reserve Board that resulted in a sharp rise in inflation, the likes of which had not been seen in decades. While things have since settled down some, we are still navigating through the challenges that were brought to the table for both consumers and producers. We are aiming to provide readers with an update on the impact inflation is currently having, and how you can best follow the right data on inflation trends.

Inflation Impact on Consumers

As we analyze the Consumer Price Index (CPI) data for March, inflation came in at 3.5% above the year-ago level and slightly above our expectations. However, ITR Economics is expecting disinflation to take hold and persist throughout the year.

It is important to remember that with disinflation, prices are still rising, but the rate of inflation is slowing down.

Expect disinflation into the middle of 2025, with the Prices 12/12 troughing at around 2.6%. Inflation will then pick up through at least 2026 as the economy builds up steam. Expect pricing trends to vary by vertical market. Sellers of goods and services should track market-specific pricing metrics to maximize margin protection potential.

[ Further Reading: Do Not Miss Out on These Business Opportunities Ahead of the 2030s. ]

Inflation Impact on Producers

For producers, expect relatively flat prices throughout the remainder of 2024. This is due to several factors offsetting each other and keeping prices from budging too far in either direction. As pressures such as wages and the current labor market push prices up, high interest rates and money supply contraction keep prices grounded.

The best course of action is to increase efficiencies to protect your margins. Also, communicate your competitive advantages to your customers clearly and effectively. This will prop up your own prices and further help you maximize your margins.

There are so many voices in the media world that also talk about these key issues, which has a significant impact on your business. When was the last time you were steered in the wrong direction by a news headline? To help your team focus on only the facts of the latest headlines, ITR Economics has introduced an exciting new weekly podcast, By the Numbers™. This new show is backed by our unparalleled forecast accuracy and will help you cut out the noise.

For even more expert insights, stay tuned to ITR Economics for our latest blogs, videos, and webinars to get the most accurate information that will set your business on the right path to success.