There’s increasing evidence that higher corporate profits are driving inflation.
From the Hill:
Adjusted profits after taxes hit a record high of $2.8 trillion, beating the record of $2.7 trillion in the third quarter of 2022. Profits increased 3.9 percent on the quarter, above expectations of around 3.3 percent. [emphasis added]
This news preceded today’s announcement that inflation ticked up 0.4% in March, a number higher than expected. Annualized the rate is 3.5%, higher than wanted but much lower than this time last year.
Consumer goods prices have gone up much more than other goods and services, with prices for packaged foods and drinks noticeably higher.
So…corporate profits AND consumable prices are increasing, with both higher than expected.
The good news is wages are still trending higher than inflation, despite the profiteering of big corporations.
What does this mean for you?
Wages are up – which means consumers are holding their own, but increases will affect WC premiums and indemnity expenses.
Joe,
The high corporate profits reflect lax antitrust regulation. Some of the oligopolies are not even recognized by many such as the bread aisle and eggs. Car rental companies are a triopoly. These companies have huge pricing power. In addition, executive compensation is generally tied to profitability. One must also include federal budget deficits, which are heavily due to tax cuts that have favored the wealthy. Joe, we have a problem.
Good points Jeffrey – as you’ve noted previously, check out the market dominance of Bimbo Bakeries and Flowers Foods in the bread aisle and Cal Maine in the egg aisle.
their profits come from our pockets.
be well Joe