{"id":7456,"date":"2022-03-13T16:40:08","date_gmt":"2022-03-13T16:40:08","guid":{"rendered":"http:\/\/lonecandle.com\/?p=7456"},"modified":"2022-03-13T16:40:08","modified_gmt":"2022-03-13T16:40:08","slug":"corporate-pricing-is-boosting-inflation-but-were-still-buying","status":"publish","type":"post","link":"https:\/\/lonecandle.com\/?p=7456","title":{"rendered":"Corporate pricing is boosting inflation \u2014 but we\u2019re still buying"},"content":{"rendered":"\n

\n\n“On recent earnings calls<\/a>, massive corporations have posted huge profits<\/a> and promised continued price increases<\/a>, evenas inflation continues to rise to rates not seen in decades.<\/p>\n\n\n\n

For example, Starbucks celebrated a 31 percent increase in profits at the end of 2021 \u2014 but it still plans to hike prices this year, the New York Times<\/a> reported earlier this month. Tyson Foods, the meat processing behemoth, raised its prices 19.6 percent overall<\/a>, driving record stock prices for the company.<\/p>\n\n\n\n

Inflation, meanwhile, hit afour-decade high<\/a>in January, with the consumer price index increasing 7.5 percent over the past year, before seasonal adjustment. Although prices dropped in the energy sector for goods like gasoline and fuel oil, every other sector \u2014 including medical care, apparel, transportation, food, and shelter \u2014 saw increases, resulting in the largest overall 12-month increase since 1982.<\/p>\n\n\n\n

Some of that\u2019s to be expected: With Covid-19 still throwing kinks into the global supply chain<\/a>, the challenge of getting goods and materials where they need to be translates into increased prices for both companies and consumers. Meanwhile, consumers have increased purchasing power due to wage increases and stimulus benefits like checks, child tax credits, and low interest rates \u2014 and at least in the US, they\u2019ve proven willing to pay higher prices. At its core, those are the necessary ingredients for inflation \u2014 demand outstripping supply.<\/p>\n\n\n\n

But some economists and politicians say that corporations are using inflation as an excuse to jack up prices beyond what\u2019s necessary to account for their increased costs. More than just passing those costs onto consumers, they say, corporations are taking advantage of the unprecedented global economic circumstances to increase their profits, simply because they can.”<\/p>\n\n\n\n

…<\/p>\n\n\n\n

“there\u2019s plenty of pushback, both political and economic, to this perspective. A survey of a number of leading economists by the Initiative on Global Markets<\/a> at the University of Chicago\u2019s Booth School of Business showed that a majority of those surveyed \u2014 67 percent \u2014 disagreed or strongly disagreed with the statement, \u201cA significant factor behind today\u2019s higher US inflation is dominant corporations in uncompetitive markets taking advantage of their market power to raise prices in order to increase their profit margins.\u201d Only 7 percent of those surveyed agreed or strongly agreed with the statement.”<\/p>\n\n\n\n

…<\/p>\n\n\n\n

“But critics of major corporate price increases aren\u2019t arguing that the consolidation is the only force driving inflation; rather, that because these conglomerates hold so much of the market share, they are able to raise prices out of step with the actual price increases they\u2019re incurring and passing on to consumers \u2014 essentially, that they\u2019re using the current inflationary environment as an excuse to raise prices more than necessary because they don\u2019t have competitors to drive them to keep prices down, in turn contributing to the problem of inflation.”<\/p>\n\n\n\n

https:\/\/www.vox.com\/2022\/2\/20\/22943257\/inflation-corporations-price-hikes-consumer-price-index<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

“On recent earnings calls, massive corporations have posted huge profits and promised continued price increases, even as inflation continues to rise to rates not seen in decades.<\/p>\n

For example, Starbucks celebrated a 31 percent increase in profits at the end of 2021 \u2014 but it still plans to hike prices this year, the New York Times reported earlier this month. Tyson Foods, the meat processing behemoth, raised its prices 19.6 percent overall, driving record stock prices for the company.<\/p>\n

Inflation, meanwhile, hit a four-decade high in January, with the consumer price index increasing 7.5 percent over the past year, before seasonal adjustment. Although prices dropped in the energy sector for goods like gasoline and fuel oil, every other sector \u2014 including medical care, apparel, transportation, food, and shelter \u2014 saw increases, resulting in the largest overall 12-month increase since 1982.<\/p>\n

Some of that\u2019s to be expected: With Covid-19 still throwing kinks into the global supply chain, the challenge of getting goods and materials where they need to be translates into increased prices for both companies and consumers. Meanwhile, consumers have increased purchasing power due to wage increases and stimulus benefits like checks, child tax credits, and low interest rates \u2014 and at least in the US, they\u2019ve proven willing to pay higher prices. At its core, those are the necessary ingredients for inflation \u2014 demand outstripping supply.<\/p>\n

But some economists and politicians say that corporations are using inflation as an excuse to jack up prices beyond what\u2019s necessary to account for their increased costs. More than just passing those costs onto consumers, they say, corporations are taking advantage of the unprecedented global economic circumstances to increase their profits, simply because they can.”<\/p>\n

…<\/p>\n

“there\u2019s plenty of pushback, both political and economic, to this perspective. A survey of a number of leading economists by the Initiative on Global Markets at the University of Chicago\u2019s Booth School of Business showed that a majority of those surveyed \u2014 67 percent \u2014 disagreed or strongly disagreed with the statement, \u201cA significant factor behind today\u2019s higher US inflation is dominant corporations in uncompetitive markets taking advantage of their market power to raise prices in order to increase their profit margins.\u201d Only 7 percent of those surveyed agreed or strongly agreed with the statement.”<\/p>\n

…<\/p>\n

“But critics of major corporate price increases aren\u2019t arguing that the consolidation is the only force driving inflation; rather, that because these conglomerates hold so much of the market share, they are able to raise prices out of step with the actual price increases they\u2019re incurring and passing on to consumers \u2014 essentially, that they\u2019re using the current inflationary environment as an excuse to raise prices more than necessary because they don\u2019t have competitors to drive them to keep prices down, in turn contributing to the problem of inflation.”<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[993,217,165,1316],"class_list":["post-7456","post","type-post","status-publish","format-standard","hentry","category-article-share","tag-corporations","tag-economics","tag-economy","tag-inflation"],"_links":{"self":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/7456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7456"}],"version-history":[{"count":1,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/7456\/revisions"}],"predecessor-version":[{"id":7457,"href":"https:\/\/lonecandle.com\/index.php?rest_route=\/wp\/v2\/posts\/7456\/revisions\/7457"}],"wp:attachment":[{"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lonecandle.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}