3 ms·

If corporate profits didn't outpace inflation, no businesses would ever exist. The only time that's possible is hyperinflation or a business with declining prof

If corporate profits didn't outpace inflation, no businesses would ever exist. The only time that's possible is hyperinflation or a business with declining profits which is certainly not what we want. Also the fed printed tooooons of money besides the $600. The $600 is the only bit that ended up directly in citizen's hands.

willis936 5y ago
Profits are not revenue. Profits are not profit margins. Profit margins are rising when demand is up and supply is down.
- jandrese 5y ago
  It really doesn't help when you see a constant barrage of headlines that read "Corporation X is raising prices 10% due to inflation." headline next quarter: "Corporation X announces 10% profit margin growth despite inflation pressures." This is happening every day now. Corporate profits are at record highs across the economy. It's hard to take them seriously when they are crying about workers demanding raises and increases in raw materials when they are posting the largest profit margins in history. https://www.reuters.com/business/investors-watch-us-companies-record-profit-margins-costs-rise-further-2021-09-22/ https://www.reuters.com/business/investors-watch-us-companie...
  - dahdum 5y ago
    Profit is a lagging indicator, you can't set your prices based on what supplies used to cost and expect to stay in business. My local pizzeria had their best 2 years ever during the pandemic, yet they still raised their prices this year due to labor and supply cost. I can't really fault them for not wanting to lose a bunch of money this year to somehow make up for that.
    - willis936 5y ago
      You're describing a static profit margin scenario, which is not what we're observing with the largest companies with the highest profits. https://www.yardeni.com/pub/sp500margin.pdf https://www.yardeni.com/pub/sp500margin.pdf

3 ms·

If corporate profits didn't outpace inflation, no businesses would ever exist. The only time that's possible is hyperinflation or a business with declining prof

by squeaky-clean 5y ago

willis936 5y ago
Profits are not revenue. Profits are not profit margins. Profit margins are rising when demand is up and supply is down.
- jandrese 5y ago
  It really doesn't help when you see a constant barrage of headlines that read "Corporation X is raising prices 10% due to inflation." headline next quarter: "Corporation X announces 10% profit margin growth despite inflation pressures." This is happening every day now. Corporate profits are at record highs across the economy. It's hard to take them seriously when they are crying about workers demanding raises and increases in raw materials when they are posting the largest profit margins in history. https://www.reuters.com/business/investors-watch-us-companies-record-profit-margins-costs-rise-further-2021-09-22/ https://www.reuters.com/business/investors-watch-us-companie...
  - dahdum 5y ago
    Profit is a lagging indicator, you can't set your prices based on what supplies used to cost and expect to stay in business. My local pizzeria had their best 2 years ever during the pandemic, yet they still raised their prices this year due to labor and supply cost. I can't really fault them for not wanting to lose a bunch of money this year to somehow make up for that.
    - willis936 5y ago
      You're describing a static profit margin scenario, which is not what we're observing with the largest companies with the highest profits. https://www.yardeni.com/pub/sp500margin.pdf https://www.yardeni.com/pub/sp500margin.pdf