Operating a Business in the Era of Inflation

After maxing out at 9.1% in June 2022 – the most robust reading since the early 1980s – inflation has eased for US consumer prices as supply chains have loosened, tailwinds from COVID-era stimulus checks have dissipated, and monetary tightening has softened demand. As of October 2024 (the latest available data), inflation was at a more normal (though still slightly elevated) 2.6%. However, consumers are still feeling the pinch from higher price levels, as the US Consumer Price Index is up 22.8% since the end of 2019.

While inflation has abated significantly, the signs of future increases in inflation are already present, and ITR Economics is forecasting ongoing price level ascent through at least the next few years, as well as an uptick in inflation beginning in the second half of 2025. In plain English: while we will not see 9.1% inflation again for at least a while, inflation is going to be painful in the coming years. Businesses need to have this reality in mind as they plan for the future. The game plan of the 2010s decade, during which inflation averaged a modest 1.8%, will not work.

ITR Economics Senior Forecaster Connor Lokar will be expanding upon the drivers of this inflationary trend during the December 2024 Insider webinar. These drivers include a fundamentally tight labor market, a national housing shortage, and rising electricity costs. More importantly for businesses, however, Connor will delve into actions to be taken regarding staffing, pricing strategy, product development, and other considerations as you prepare for the rest of the 2020s.

Further, Connor will articulate how to balance the needs of preparing for the inflation of the 2020s and preparing for the economic depression ITR Economics is forecasting for 2030–36. Nimble, prepared businesses can thrive despite these pressures, while the competition suffers. Make sure your business is ready.

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