Connect with us

Hi, what are you looking for?

Finance

Several US Based Economists and Financial Experts Blame High Corporate Profits for the Ongoing American Inflation

According to a newly released report, “resounding evidence” proves that high corporate profits are the driving force behind ongoing inflation, and companies and giant corporations continue to keep prices at sky high levels even as their inflationary costs drop.

The report, which was formed by the progressive Groundwork Collaborative thinktank, discovered that corporate profits accounted for approximately 53% of inflation during previous year’s second and third quarters. The total profits were recorded just above 11% of price growth in 40 years prior to the covid pandemic.

According to data released by the Bureau of Economic Analysis and National Income and Products Accounts, prices for consumers rose by approximately 3.4% over 2023, whereas the input costs for producers increased by a mere 1%. Liz Pancotti, who works as a Groundwork strategic advisor, was quoted saying that although costs have come down substantially, corporations were “quick to pass on their increased costs to consumers” but not their savings.

The “Greedflation” 

Since inflation hit the US market during the ongoing covid pandemic in 2021, a high-stakes debate has been carried out about its sources. Many US economists have claimed that corporate profits, or infamously referred to as “greedflation,” in addition to supply chain issues were responsible for these sky-high prices. The year of 2021 recorded hike in prices as labor costs jumped and supply chains remained tumultuous due to the covid pandemic and the (still-ongoing) Russia-Ukraine war.

Both of these major global events had, as the report suggested, snarled shipping traffic and left energy supplies doubtful. However, damage control has been efficiently carried out, with the labor market stabilizing and many commodities and services producers’ prices lowering down as the world entered the new year of 2024.

Various economic experts and finance analysts have claimed that an approximate of 60% drop in essential goods and services’ inputs was a direct result of large declines observed in energy costs, such as diesel duel and jet fuel. In addition to this, transportation and warehousing costs have also seen a fall of 4% since June 2022 inflation. Although there has been some relief, prices still remain high. Consumers continue to pay approximately 25% more for groceries.

The Russia-Ukraine War, The Covid Pandemic, and The “American Inflation” 

Isabella Weber, an economist associated with University of Massachusetts, also addressed this issue, stating that over the past few years, corporations have maintained high prices by exploiting cost shocks caused by events such as the pandemic, the Russia-Ukraine war and by continuously coordinating price hikes through the US market.

On the other hand, workers will also not be getting a break anytime soon. According to latest data, corporate profits as a share of national income are up by approximately 29% and workers’ share of profits continues to stay low from pre-pandemic levels.

The current Biden administration has taken significant steps to strengthen supply chain post-pandemic, with President joe Biden asking corporations to stop exploiting consumers. But many US economists and finance experts suggest more aggressive steps to counter this issue, as several nations across the world have already risen above the problem of inflation following the end of the covid pandemic.

 

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Celebrity

Heidi Klum recently revealed to the media that her daughter Leni had stumbled across her “sex drawer” as a kid. The supermodel also revealed...

Crime

The cinemas can get trippy when it comes to sci-fi. There is an opportunity for a unique level of freedom to get weird. Some...

Finance

According to recent reports released by the US government, businesses and individuals across the nation should expect to witness income tax cuts across 17...

Crime

Flight Night will feature Taraji P. Henson The limited series Fight Night features Taraji P. Henson, who previously acted as her co-star in the...