Pricing Power Remains Elusive

Bloomberg reports that companies are not gaining the pricing traction they had hoped for as the economy picked up.

“There is no pricing power, and the notion that it’s returned is just wishful thinking,” says James Smith, a former Federal Reserve economist who directs the University of North Carolina’s Center for Business Forecasting in Chapel Hill. “You can pass on a little bit of your higher energy costs, but that doesn’t add anything to your bottom line.”

Not surprisingly, differentiated products like Catepillar mining trucks and GE’s advanced plastics have held more pricing power than product like GM cars or AT&T long distance.

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