"Tariffs could be supercharging that historic trend: Companies might finally be raising prices to address the costs they ate throughout much of last year. Adobe's Digital Price Index rose by the most, month on month, in its 12-year history in January - even faster than at the height of the inflation shock in 2022. "The strong increase could be a sign of greater tariff pass-through to start off the new year," with large price changes for electronics, furniture, bedding and appliances,"
"State of play: Official government inflation data for January is not scheduled to be released until next week, pending a government shutdown. Still, there's other evidence that January could be a spicy month for price hikes. The Institute for Supply Management's manufacturing survey sub-index for prices ticked up to 59 in January, from 58.5, the highest since September."
"While there is still caution that higher prices could crimp demand, several references in the Federal Reserve's compilation of anecdotal information from across the U.S. point to price increases in the new year. In Atlanta, for instance, "many contacts expect to implement price increases in the first half of 2026 to preserve margins, especially those who held prices steady in 2025," according to the most recent Beige Book. The Philadelphia Fed notes that many businesses anticipated "tariffs to seep into general price levels.""
Many companies reassess pricing at the start of the year, a factor that historically drives above-average January price increases. Tariffs may be accelerating that trend as firms begin passing through costs they absorbed last year. Adobe's Digital Price Index posted its largest month-on-month rise in 12 years, exceeding peaks from the 2022 inflation shock. ISM manufacturing price measures ticked higher, and Federal Reserve regional reports cite widespread expectations of price increases to preserve margins. Some businesses explicitly expect tariffs to seep into general price levels, while official January inflation data remains pending.
Read at Axios
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