Key findings from Operating Performance Report 2019
The U.S. Economy has continued an upward trend for the second year in a row. After adjusting for inflation, the Gross Domestic Product (GDP) increased 2.9%. The average unemployment rates are at a 50-year low of 3.6% as of June 2019. Inflation has been ticking upward while the Federal Reserve has been trying to keep it under control. In the meantime, the GDP deflator (a broad measure of the overall economy) increased by only 2.2. The Federal Reserve raised rates four times in 2018, but they do not anticipate raising rates for the rest of 2019 amid slower economic growth. (When the Fed raises rates, banks are less incentivized to lend, since they are earning more to park their cash in reserves.)
Each month, the U.S. Department of Commerce Bureau of Labor Statistics reports on two key inflation indicators: The Consumer Price Index (CPI) and the Producer Price Index (PPI). These indexes are the two most important measurements of retail and wholesale inflation, respectively. Rapidly rising prices not only affect the price consumers pay, they also affect the cost businesses have to pay for materials and inventory. When replacement inventory costs more than the inventory you just sold, it can lead to inventory shortages.