Datawatch: Uncontrolled corporate pricing power a factor in US inflation

Profit margins of American companies have reached levels not seen since World War II.

According to a paper published by the University of Massachusetts, there is a strong correlation between the rising share of corporate profits in GDP and the sharp rise in prices in the US following the COVID pandemic.

After earning windfall profits due to volatility in commodity prices and supply constraints, large companies have been encouraged to raise prices to increase profit margins.

They found that there was little evidence that the models used to explain the inflation of the 1970s—such as excess aggregate demand, money supply expansion or increased wage costs that induced the spiral—were true of this recent one. applied to growth. They say the post-Covid-19 price hike is mainly sellers’ inflation. Where cost increases are being experienced by all their competitors, companies have felt safe to pass them on in the hope of an “implicit agreement” that rivals will do the same.

Federica Coco and Keith Frey

Our other charts of the week. , ,

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The introduction of remote working as a result of the pandemic has helped boost the birth rate, especially among wealthier and more educated women.

“While the long-standing decline in fertility rates across the developed world makes it difficult to be optimistic about the future trajectory of births overall, the rise of remote working is one factor helping to push in the other direction, At least some subgroups of the population,” said the authors of the analysis conducted by the Economic Innovation Group, a US-based think-tank.

An increase in the birth rate would provide a significant boost to economic growth, and counteract demographic changes such as an aging population.

The study also found that unmarried remote workers were significantly more likely than those who do not work remotely to plan to marry in the next year. This is possibly because remote workers have higher migration rates than other workers, meaning that those interested in marriage may be able to relocate closer to potential spouses.

federica coco

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The approval rating of Britain’s leadership, since 2013, is set to exceed 50 percent in 2022 for the first time since the survey began. At 51 per cent, this is higher than the 46 per cent who approve of the UK’s leadership.

The last time a majority of Britons approved of the country’s leadership was in 2006, when Tony Blair was prime minister.

federica coco

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Most Britons supported the strike by nurses and ambulance workers. According to polling company Ipsos, the stock has gained 3 per cent since January.

Teachers and railway workers are the next most widely supported, with sympathy also rising since January, while support for the strike has decreased in other sectors, including border and passport control staff, civil servants, university staff and driving examiners.

Talks on Thursday between ministers and health unions resulted in a promising wage proposal. Substantially improved conditions for nurses, ambulance workers and other NHS staff in England have raised hopes that other disputes could soon be resolved.

The RMT has agreed to let members vote on a better offer from Network Rail and teaching unions began talks on Friday over pay, conditions and workload.

serena chan

The European energy crisis hasn’t kept customers away from big cars.

Total sport utility vehicle sales rose 14 percent year-on-year to 464,000 units in January, accounting for a record 51 percent share of new car registrations in the European Union, according to market researcher Jato Dynamics.

While petrol-powered and diesel models remained the most popular options, accounting for around three-quarters of new SUV sales, the figures suggest demand for plug-in hybrid and pure electric versions of the “Chelsea tractor” is on the rise.

The SUV continues to be hugely popular despite the launch of a green electric model. Plug-in hybrid SUVs, which offer a compromise between more polluting internal combustion engines and costlier pure electric vehicles, have experienced particularly high interest.

patrick mathurin

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