Inflation Increases

The Consumer Price Index (CPI) rose to 3.7% in August as measured on a year-over-year basis. This inflation gauge was measured at only 3.2% in July.

Our dreaded nemesis again shows his ugly face. But if you’ve gone to a grocery store or filled up your tank in the past month, this wasn’t a surprise.

Once volatile food and energy prices were stripped out of the measure, core CPI increased by .3%. This simply means one thing.

We aren’t out of the woods yet.

Federal Reserve officials have already signalled that they won’t raise interest rates at their meeting next week. But the odds are six to one, half a dozen, or the other on whether they’ll raise interest rates at their December meeting.’

If prices keep going up, they may not have a choice.

Let me leave you with this.

Longer periods of increased inflation have a grinding down effect on our profits. If you don’t raise your prices in response, you’ll end up with significantly less money in your pockets. Either that or you’ll be forced to close up shop and go find a job.

Perish the thought, my Brothers and Sisters. Perish the thought.

Let me put problem this into numbers that are easier to understand. If you look at what inflation has done to the buying power of $100 since January of 2020, you’d need $119.02 today to purchase the same basic items that you could afford back then.

On average, if you haven’t raised your prices by 19.02% in that same time frame, then you may be behind the curve.

This doesn’t take into account the price variances on individual goods and services that we all must factor into our individual equations. If you’re a baker, and the cost of eggs or flour has increased more than 19% in the past 32 months, then you’ll need to put those additional increases into your business plan to at least stay even.

These are difficult decisions to make. Raising your prices with a recession on the horizon isn’t an easy decision. It’s one of those graduate school arguments where there aren’t any good answers until you actually know what the future will bring.

But these quandaries aren’t simple black and white issues. There are shades of grey that can be exploited.

You may not want to do an across-the-board price hike. We all have products that compete closely with others where a difference might be noticed.

But, on the other hand, we all have specialty products where a price hike might not be noticed. If there isn’t much competition for this or that, you might be able to expand your margins and make up a part of that difference.

It may be time for you to do some chiseling.

We’re all going to get through this. Let’s get through it together.

As an inducement, we’re offering 33% off your first six months of bookkeeping and / or the first three months of electronic payroll services on a complimentary basis. In order to claim this benefit, please click on the appropriate button below and provide your contact information. We’d love to help.

Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,

Sincerely yours,

Chris Amundson


Accounting Solutions Ltd.



Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.