Corporate profits hit record high in third quarter amid 40-year-high inflation
Corporate profits in the nonfinancial sector hit a record high of $2.08 trillion in the third quarter even as 40-year-high inflation continues to squeeze American consumers.
Profits adjusted for inventories and capital consumption rose $6.1 billion from the second to third fiscal quarters, the Commerce Department reported Wednesday, continuing a red-hot recovery from the flash recession caused by pandemic shutdowns.
Following a two-quarter dip in 2020, quarterly profits have surged by more than 80 percent over the last two years, from around $1.2 trillion to more than $2 trillion, adding weight to arguments that the private sector is driving inflation by exploiting consumer expectations to keep prices elevated.
The “Fed should make clear that rising profit margins are spurring inflation,” Paul Donovan, UBS chief economist of global wealth management, wrote in the Financial Times in November, asking Fed Chairman Jerome Powell to elucidate this point as he shepherds the U.S. central bank to raise interest rates and slow economic activity.
https://thehill.com/policy/finance/3756457-corporate-profits-hit-record-high-in-third-quarter-amid-40-year-high-inflation/