Atlanta Fed survey reports businesses' plan to pass 50% of tariff costs onto consumers

A survey by the Federal Reserve Bank of Atlanta reveals that US companies intend to pass on up to half of their tariff-related expenses to American consumers, who are still recovering from the pandemic-era inflation surge, Bloomberg reports.

The findings also indicate the adjustment of pricing strategies by many firms, diverging from their 2018 approach when they passed nearly all tariff-imposed costs onto customers, Atlanta Fed researchers noted in a Thursday report.

Bank analysts suggest the data reflect heightened consumer price sensitivity following the recent inflationary spike. As a result, businesses cannot fully offset rising costs without risking a drop in demand.

For now, the impact of tariffs on US labor markets and prices remains muted, Bloomberg notes. Inflation continues to slow, while employment stays stable. However, according to the Federal Reserve’s Beige Book released Wednesday, economic activity has recently declined amid trade-related uncertainty.