DeacInVermont
Well-known member
I don't have the time right now to dive into their study, but there are a few things that don't add up for me.Half of recent US inflation due to high corporate profits, report finds
A new report claims “resounding evidence” shows that high corporate profits are a main driver of ongoing inflation, and companies continue to keep prices high even as their inflationary costs drop.
The report, compiled by the progressive Groundwork Collaborative thinktank, found corporate profits accounted for about 53% of inflation during last year’s second and third quarters. Profits drove just 11% of price growth in the 40 years prior to the pandemic, according to the report.
Prices for consumers rose by 3.4% over the past year, but input costs for producers increased by just 1%, according to the authors’ calculations which were based on data from the Bureau of Economic Analysis and National Income and Products Accounts.
Half of recent US inflation due to high corporate profits, report finds
Thinktank report says ‘resounding evidence’ shows companies continue to keep prices high even as their inflationary costs dropwww.theguardian.com
The Fed breaks down inflation components into 3 categories: goods, housing services, and services ex-housing, which compose 40%, 30%, and 30% of US inflation respectively. Goods inflation has been less than 2% YOY since April. What is driving the current CPI number is persistently high shelter costs (running from about 8% at the beginning of the year to about 6% as of November). I don't see where "corporate profits" resulting from low input costs would contribute to high shelter costs, especially as a function of something having changed there since before the pandemic.
Input costs for producers would seem to relate most directly to the Goods component of inflation, or at least that seems to be how the authors are attributing it based on their diapers example. So, if goods inflation is close to zero, they would be arguing for deflation, which maybe they are? I assume they break down their attribution better in the actual study, but the press release aspect to this seems more like narrative creation.
I have more than my share of complaints about the financialization of the economy and economic inequality, I'm just struggling to get to the article's conclusion based on what I'm reading.