American Companies Raise Prices and Cut Growth as 23% Airfares Signal 3-Way Cost Squeeze
Updated
Updated · CNBC · Sep 20
American Companies Raise Prices and Cut Growth as 23% Airfares Signal 3-Way Cost Squeeze
3 articles · Updated · CNBC · Sep 20
Summary
U.S. companies are hoarding inventory, adding freight surcharges, cutting flights and, in some cases, seeking bankruptcy protection as tariffs, Iran-war fuel costs and higher interest rates hit at once.
Fed rate hikes are compounding the pressure by raising the cost of financing inventory and equipment just as diesel, steel, aluminum and parts prices surge; one Original Saw Co. component jumped to $87 from $42.
Smaller and middle-market manufacturers are taking the hardest hit because they depend more on short-term borrowing, while capital-intensive sectors such as trucking, auto suppliers and commercial real estate face the sharpest margin squeeze.
Auto suppliers show the strain: Lucerne International scrapped a $50 million Michigan forging plant, top-100 supplier EBIT fell to 4.2% last year, and Grupo Antolin sought Chapter 15 protection in July.
Large S&P 500 companies remain more insulated for now, but economists warn higher rates may not fix inflation driven by war, tariffs and AI-related demand, leaving the economy resilient yet increasingly exposed to a sharper shock.