Inflation Is Starting to Bite Into Profits at Procter & Gamble
To help households cope with the realities of business closures and job losses due to the pandemic, many governments around the world added some level of fiscal stimulus to their economies. This created surplus cash in some cases and resulted in increased demand for some products -- including products with temporarily closed production facilities or supply chain issues. As vaccination campaigns rolled out and those countries started reopening businesses, more consumers got out and started spending normally. This additional surge in demand for consumer goods (some already in short supply) has lead to shortages of all kinds.
These unusual and exacerbated shortages (especially in the supply chains of manufacturers) are causing production costs to rise and threatening to put a dent in business profits for many companies. Indeed, even a giant company like Procter & Gamble (NYSE: PG) is falling victim to inflationary pressures.
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Source Fool.com
