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Companies slowly start to raise prices over exploding inflation data

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Yahoo Finance's Brian Sozzi breaks down why more companies are raising prices after U.S. consumer prices climbers 0.8% in April.

Video Transcript

JULIE HYMAN: Brian Sozzi's been keeping a list, checking it twice of all the companies that are raising their prices amidst all of our talk about inflation. How many companies are on this list so far?

BRIAN SOZZI: I've lost track, Julie. I started it with three companies a couple of weeks ago, and they continue to add up. I have this full story right now on Yahoo Finance in our Yahoo.com homepage. But General Mills-- about a month ago, we talked to General Mills CEO Jeff Harmening. Said he has pushed through price increases on his products. Obviously, that is snacks and cereal. Hormel raised prices on Jennie-O turkey products because of higher price for corn. Reynolds last week said they are raising prices pretty significantly because of higher costs to produce their aluminum foil, among other things. Procter & Gamble, price increase. Whirlpool, price increase. Kimberly-Clark, price increase. Temper-Sealy-- just talked to them a week and a half ago-- price increase.

And these are just the consumer-facing companies that are increasing prices. I'm sure I could compile a whole other list-- and I hope my editor is not watching this right now because she might just have me do that-- of industrial companies. Is a Caterpillar product going up in price because of higher steel costs? I bet it is. And Myles, we were talking about it yesterday. Are these price increases transitory? I'm not so sure if they are. But I know if Jennie-O turkey products are going up about 7% to 10%, a company like a Hormel is going to be hard-pressed to just slash those prices and go back to what they were charging before if it boosts their sales and profits.

MYLES UDLAND: Well, I mean, look, the inflation data that we talk about, right, is all about the one-time increase in the price of goods versus either the prior month period or the prior year period. So that, yes, these price increases will show up in the coming months as the prices are increased. Will they be raised in perpetuity, is really the inflationary question that the Fed is trying to answer.

Another question for each of these examples that we bring out-- and the answer matters quite a bit-- are these prices being increased in response to demand from consumers, which seems to broadly be the impulse so far in this recovery? Or are the prices being increased because there is not enough-- are they having supply problems? And so they cannot have the volume that they need or desire for certain products. And so, to hit the expected revenue for a certain category, must raise prices in the absence of adequate supply, which is also here an issue as well.

But I think, again, the inflation conversation, Sozzi, like, I spent all day yesterday, pretty much, replaying our conversation in my head. And I was thinking about the used car conversation. Because, again, if people are paying more for used cars, it is both in response to there not being an adequate supply of them, and also in response to consumers being more confident in their ability to afford said cars. And so, I think the simple breakdown of inflation up that bad for consumers leaves out that there's a dynamism also on the income side of the statement for consumers as well.