NEW YORK (AP) All those cheap deals everyone has gotten so used to in recent years may slowly become harder to find now that corporate America seems finally to be regaining some ability to raise prices.
Don't worry, this doesn't mean prices will suddenly race through the roof. But some new data indicates that for the first time in a long while companies aren't feeling as pressed to keep their prices as low on everything from apparel to computer systems.
This is actually good news though their consumers may disagree. It's just the jolt the economic recovery needs right now to keep it going.
''Pricing power is coming back, which will give companies higher earnings and allow them to hire more people,'' said Sung Won Sohn, chief economist at Wells Fargo & Co. in Minneapolis. ''And increased hiring will be the key and final indication that sustainable economic growth is here.''
It's not that there are cheers for prices to soar. Inflation right now is considered quite tame, trending around 2 percent to 2.5 percent.
But some lift in prices could ward off the possibility of deflation, which has even been noted as a serious concern by Federal Reserve policy-makers.
When deflation takes hold, prices fall and consumers stop spending because they think even better deals are on the way. Then businesses make even deeper price cuts to attract customers, which eat away at profits. A destructive cycle can take hold.
That's why recent reports showing some firming of prices are important to note.
The October survey of about 100 manufacturers by Federal Reserve Bank of Philadelphia showed that about 17 percent of companies are seeing an increase in the prices they get for their goods vs. 9 percent last spring.
In this month's Morgan Stanley Business Conditions Index, more companies said they were raising prices than cutting them for the second consecutive month. In addition, the investment firm's research analysts who participate in the survey said 37 percent of the companies under their coverage raised prices from a year ago.
There are even some gains showing up in industries that have been plagued by deflationary pressures. What consumers pay for clothing, for instance, rose 0.5 percent in September, according to the Labor Department. While still only a slight rise, it is much better than the decline in prices last spring.
At some companies, the good news is prices aren't falling as much as they have been. At EMC Corp., for instance, analysts say pricing has stabilized and declines are now more in line with historical ranges. And the data storage systems maker said in its earnings conference call last week that it was trying to wean customers off the practice of waiting until the last day of the quarter to get the best price.
Still, no one is likely to make a price move fast. With customers still hunting for bargains, companies don't want to be caught bumping up their prices so much that they suddenly look expensive against the competition.
Intel knows well the kind of backlash that can cause. During its quarterly conference call with analysts last week, chief financial officer Andy Bryant conceded ''we are still in the hole we dug ourselves'' after price increases earlier this year in its flash memory business for cellular phones cost the chipmaker market share and hurt revenues.
Which just shows that for all the good raising prices can do, scaring off customers in the process won't help either business or the economy.
Rachel Beck is the national business columnist for The Associated Press. Write to her at rbeck(at)ap.org
Peninsula Clarion ©2014. All Rights Reserved.