Curtis Dubay
Chief Economist, U.S Chamber of Commerce


April 21, 2022


Fill me in:  On April 12th, the Bureau of Labor Statistics released the Consumer Price Index (CPI), which measures the change over time in the price of consumer goods. The new numbers for March 2022 show a 1.2% rise in the cost of goods and services from February, up 8.5% in the last year, with energy and food being the largest contributors to rising prices. 

Rising costs in housing, food, and energy are making it difficult for American families and businesses to get ahead, and inflation continues to chip away at their buying power and impact the larger workforce. 

Efforts by the administration and policymakers, such as Senators Bernie Sanders and Elizabeth Warren, to blame businesses for rising prices ignores all evidence to the contrary. Instead of finger pointing, let’s have a thoughtful discussion about the root causes of inflation and potential remedies. 

Inflation chart March data copy

Making the case: 

Businesses of all sizes are raising prices because of what is happening across the entire economy that is  beyond their control, including supply chain disruptions, worker shortages, world events, and U.S. monetary policy.  

On March 29, MetLife and the U.S. Chamber released the 2022 Q1 Small Business Index. The report found that while small business owners are feeling good about the health of their businesses and expectations for the future, concern for inflation soared. 

  • The vast majority (85%) of small business owners are concerned about the impact of inflation, and 44% indicate they are very concerned, jumping 14 percentage points from 31% last quarter.  
  • More than two in three businesses (67%) report having to raise prices to cope with inflation.  

The survey also found that while COVID-19 remains a persistent challenge, inflation and supply chain issues are top of mind for most small businesses. 

SBI Index Q1 2022 1 1200x628 1

Setting the record straight: 

Inflation is the result of supply and demand. Pandemic related shocks, a tight labor market, and loose monetary and fiscal policy have limited the supply of many goods and at the very same time boosted demand. This has created broad-based price increases.  

Businesses raise prices when input costs rise, and they can either see their margins shrink and start losing money, or they can raise prices to offset those higher costs. 

To shift the blame to businesses is misguided and only increases the likelihood that the real causes of inflation will not be addressed, prolonging and exacerbating higher prices for families and risking a recession. 

Bottom line: 

Those who blame businesses need to grapple with the fact that companies did not raise prices before COVID-19 or even during the height of the pandemic. Were they acting out of beneficence then? No, they were setting prices given market conditions – just as they are now. 

Policymakers should be working on solutions that address the real root causes of inflation. While monetary policy remains the best tool to fight inflation, policymakers should also be focusing on easing regulations, reducing tariffs, and increasing domestic energy production.  

Here’s what won’t lower prices for families and small businesses: pointing fingers and making baseless claims rooted in politics rather than economics. 

Additional resources: 

About the authors

Curtis Dubay

Curtis Dubay

Chief Economist, U.S Chamber of Commerce

Curtis Dubay is Chief Economist, Economic Policy Division at the U.S. Chamber of Commerce. He heads the Chamber’s research on the U.S. and global economies.

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