US Corporations Rack Up Multi-Decade Record Profits Amid Rising Inflation
While U.S. citizens have been struggling with rising inflation over the past few months, corporations have reportedly netted record profits during the same period.
Aftertax profits as a share of gross value added for nonfinancial corporations—a measure of aggregate profit margins—rose to 15.5 percent in the second quarter from 14 percent in the first quarter, according to a Bloomberg analysis of a report from the U.S. Bureau of Economic Analysis (BEA). This is the highest level of profit margin for nonfinancial corporations since 1950.
The data are an indication that companies have largely been successful at passing over rising material and labor costs to consumers. While some customers might have cut down on spending due to inflation, some firms have been able to offset such loss of demand by charging customers who continue to buy their products….