Wednesday, July 09, 2008

Alcoa Report Shows Strong Inflationary Pressures

Wall Street seems pleased by Alcoa's report, because while it showed declining profits(-24%) , the decline was lower than expected. Yet as this article notes, one thing that shouldn't please them is that the report showed strong inflationary pressures. Alcoa reported that higher input prices took a big bite out of its profits, but that this was largely compensated by the fact that they were able to raise the prices they charge from their customers. That is price inflation in action.


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