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How do they calculate those numbers? I buy materials for $100 and sell them for $120 for 20% profit. My costs rise to $110 so I raise the price to $135. Consum
by tedunangst 3y ago
How do they calculate those numbers?
I buy materials for $100 and sell them for $120 for 20% profit. My costs rise to $110 so I raise the price to $135. Consumers see inflation of 12.5%. What percentage of that is corporate profit and how much is whatever else inflation is?
- bb88 3y agoIsn't that trivially calculable? Your profit was $20 before, now $25 after. So you got a 25% increase in income (!) for a 10% increase in expenses. The consumer saw a 12.5% increase in price. And that's what is being reported on corporate earning calls.
- bryanlarsen 3y agoTheir source is the Kansas City Fed, so the methodology could be tracked down that way. https://www.npr.org/2023/05/19/1177180972/economists-are-reconsidering-how-much-corporate-profits-drive-inflation https://www.npr.org/2023/05/19/1177180972/economists-are-rec...
- creeble 3y agoIf you're a public company, your quarterly profit report tells all.