Businesses revise their expectations for wage and price growth in 2021.
Texas business executives expect to hike wages this year at an annual rate of 4.7%, outpacing official forecasts for inflation this year and pointing to price pressures ahead.
Compared to just a few months ago, inflation and wage expectations have risen among surveyed business executives. The Texas Business Outlook Survey in December showed an average forecast of 4.3% for wage growth, before jumping to 4.7% in April.
Texas executives expect input prices to rise even faster this year, by a rate of 5.5%. In the same survey in December, they forecast an increase of only 3.7%.
That’s according to 376 executives surveyed by the Federal Reserve Bank of Dallas.
Growth expectations for selling prices, a closer proxy for consumer prices, rose to 4.3% in April, compared to a forecast of 3.4% four months earlier.
“Amid surging optimism