Labor Shortage, Inflation Is Accumulating - American Service Enterprises: Passing Costs Onto Consumers.

A housewife in New Jersey said, "I won't spend more than 50 dollars to buy a bar.

Recently, the United States

The cost of producing a garment is 25-50% and the labor force is 20-40%. It depends on whether the manufacturing process is complicated.

In view of the price rise, cotton prices

According to the introduction of the International Cotton Advisory Committee, cotton prices in the United States have jumped to a 150 year high of 1.90 dollars per pound, double the same period last year.

The rise in cotton prices began in August last year, and the harsh climate conditions led to a major reduction in cotton production, including China, the United States, Pakistan and Australia.

Meanwhile, as the second largest exporter of cotton after China, India's restricting export policy has also exacerbated the shortage.

More importantly, the global economic recovery has become a powerful driving force for the rising demand for cotton, making prices rise all the way up to now.

Eric Wiseman, President of VF, a famous American garment maker, has announced that the prices of many famous brands including The North Face, Nautica, Wrangler and Lee will rise to varying degrees, especially for jeans. Half of its cost comes from cotton prices.

Similarly, in the past century, the "brook brothers", with high quality materials, has raised the price of ironing shirts from $79.5 to $88.

In addition, many brands such as Levi s, Nike (Nike), Steve Madden (Steve Madden), Jesse Penny (J.C.Penny), and A&F have all expressed plans to raise prices.

In order to shift the cost of rising cotton prices, manufacturers began to switch to synthetic fibers such as rayon, and minimize the decorative items on jeans. The range of colors available for consumers has also been greatly reduced.

From the point of view of production, some Chinese garment factories that have stopped production during the recession have not yet fully regain their productivity.

Analysts believe that the shortage of labour has forced producers to pay more. Although manufacturers have turned to cheaper countries such as Vietnam, "this has basically reached the limit, with little success."

American consumers have been calculating their own prices.

A housewife in New Jersey said, "I will not spend more than 50 dollars to buy Jeans, and money should be kept for rainy days."

Even those who are well off, their spending power has been affected.

A 47 year old man who has always been keen on the "Booker brothers" brand shirt said he would set a "quota" for his own shopping. "Before buying two shirts, you can only buy one shirt and two socks."

Not only consumers have to go through a difficult period, but retailers, including WAL-MART, are also facing pressure to raise prices.

In a recent interview, WAL-MART CEO Mike Duke said, "the price increase is no doubt, but no one wants it to be the only solution. After all, these costs will be added to consumers."

However, in February 17th, the latest report released by the US labor department showed that the US CPI grew by 0.4% in January, although the absolute value of the increase is not large, but it has been rising for seventh consecutive months, higher than the average market expectation, which is benefited from the rising prices of clothing and housing.

Economists worry that the inflationary pressures of the United States are accumulating, and that more businesses are going to shift costs to consumers.