Philadelphia Fed data showing something interesting: service sector firms are getting squeezed. What they're paying for inputs just jumped to a 6-month high. What they can charge customers? Dropped to a 6-month low.
This is the margin compression story playing out in real time. Companies facing higher costs but zero pricing power. The kind of thing that shows up in earnings calls six months later as "unexpected headwinds."
When you can't pass costs through, something has to give. Usually it's headcount, capex, or both.
This is the margin compression story playing out in real time. Companies facing higher costs but zero pricing power. The kind of thing that shows up in earnings calls six months later as "unexpected headwinds."
When you can't pass costs through, something has to give. Usually it's headcount, capex, or both.