Businesses brace for years of inflation as new costs pile up

Businesses across the U.S. are bracing for years of elevated inflation as multiple cost pressures continue to build, even if a Tuesday inflation report shows some cooling after lower gasoline prices. The article says tariff effects are still moving through supply chains, instability in the Middle East is keeping oil markets tense, and a surge in AI infrastructure is raising costs for electronic components and electricity. It quotes Douglas Holtz-Eakin of the American Action Forum, saying there is little real wage growth and that inflation pain is widely distributed. For smaller manufacturers, the report highlights persistent tariff impacts, including steel costs that nearly doubled over 15 months for Calder Brothers, rising to as much as 72 cents per pound from the mid-30s. Survey results cited from the Federal Reserve Bank of New York show nearly half of firms that paid tariffs expected to raise prices again, some as far out as six months or later. Another manufacturer, Grote Industries in Madison, Indiana, reported resin costs up 30% to 40%, higher copper prices, and electronic components more than doubling due to AI data center demand, while projecting price increases in January after profits fell 20% to 30%.