WASHINGTON: Mentions of inflation on S&P 500 earnings calls have reached the highest level in more than two years, underscoring growing concerns over skyrocketing costs and weakening consumer confidence.
From paint makers to spice manufacturers, company bosses have been evaluating the impact of rising prices, coming up with ways to alleviate the pressure and reassure investors worried about the impact on margins.
The latest data on personal income and spending “paints a troubling picture of the US consumer”, Bloomberg Economics analysts Troy Durie and Anna Wong said, with inflation coming in hotter while income growth fails to keep pace.
Soaring oil prices, which have resulted in blowout results for energy majors, have pushed up the price of fuel, fertiliser, plastic resin and other key raw materials – making it more expensive to fly planes and package goods. Against this backdrop, mentions of “inflation” or “inflationary” climbed to 820 on the earnings calls of S&P 500 companies in October, the highest monthly figure since February 2024.
Industrial companies represented a quarter of all references, as high energy and logistics costs weighed on the sector. HVAC manufacturer Lennox International Inc recorded the highest number of mentions, with chief executive officer (CEO) Alok Maskara warning the company expects “inflationary pressures to continue, particularly from tariffs, components, and commodities”.
The materials sector has been similarly affected, as prices for oil derivatives continue to climb. Paint maker PPG Industries Inc detailed its plans to mitigate the pressure through price increases, though it was careful not to overstate the benefits.
“I would certainly not assume price inflation to be a tailwind in the short term because we’ve still got some work to do,” CEO Timothy M Knavish said, with chief financial officer Jamie A Beggs adding that raw materials costs were still on the rise.
Consumer companies haven’t been spared. General Motors Co (GM), the maker of Cadillacs and Chevrolets, expects a US$2bil headwind this year from higher commodity, logistics and memory prices, after inflation added around US$400mil in incremental costs in 2026.
Spice manufacturer McCormick & Co Inc is battling elevated freight costs and subdued spending. “As we go into ‘27, we still have a lot that we have to sort out right now in terms of inflation and costs and where the consumer is going to be,” CEO Brendan M Foley said on the earnings call. — Bloomberg
