Each month for the past forty years, the Federal Reserve conducts a survey of businesses, attempting to ascertain both current conditions and future anticipations of orders, costs, inventory levels, and employment. December’s survey shows continued improvement in current activity but there is a disturbing decrease of confidence in the future in those businesses surveyed.
In 2010, the businesses surveyed are expecting their costs to increase about 8% in two areas: energy and health care for employees. They project only moderate increases of about 2% in other costs. Only 12% anticipate lowering prices, while 12% project higher prices.
Welcome to the “New Normal”.