Groundwork Reacts to New Corporate Profits Data

Groundwork Reacts to New Corporate Profits Data

Profits still historically high, leaving plenty of space for wages to rise and for relief at the register

Today, the Bureau of Economic Analysis (BEA) released new data showing that corporate profits now represent over 15% of national income, the highest in over a decade. The BEA also released a revised estimate of 3rd quarter GDP growth, showing that the economy grew at 5.2% on an annualized basis, even faster than previously understood.

This data release follows remarks by President Biden, where he called out corporations for keeping their prices high even after supply chain snarls have eased.

Groundwork’s Acting Executive Director Kitty Richards reacted with the following statement:

“Inflation has fallen dramatically even as the economy grows rapidly and unemployment remains historically low. But today’s corporate profits data show that prices can still fall further even as wages keep rising. It’s time for corporations to bring down prices and share their windfalls with the workers who drive our economy.

“Pandemic-era supply chain disruptions enabled corporations to hike prices and juice profit margins to highs not seen in more than 60 years. Now supply chains have returned to normal, but corporations in many sectors are still charging inflated prices and extracting exorbitant profit margins.

“The Administration has taken important steps to strengthen supply chains and crack down on the corporate concentration that has enabled corporations to raise prices at will. However, more must be done to hold corporations accountable for taking advantage of workers and families at the register.”

Email press@groundworkcollaborative.org to speak with Groundwork’s Kitty Richards about the latest corporate profits data and the Administration’s efforts to crack down on price gouging. 

Recent Reporting on Corporate Price Gouging:

• Vox: Why Diet Coke got so expensive. “They’ve been pretty relentless in raising prices over the last few years, really ever since the pandemic. It’s not just Coca-Cola, but it’s PepsiCo and Keurig Dr. Pepper, too. They’ve just continued to raise prices with very little negative impact on their sales volume,” said Garrett Nelson, vice president and senior equity analyst at CFRA Research, a financial intelligence firm. [11/28/23]

• Bloomberg: Biden Touts Steps to Ease Inflation as Holiday Shopping Starts. “Let me be clear to any corporation that has not brought their prices back down, even as inflation has come down, even as supply chains have been rebuilt — it’s time to stop the price gouging,” Biden said…Supply chain pressures following the pandemic accounted for 60% of the surge in US inflation, according to a Federal Reserve Bank of San Francisco analysis. [11/27/23]

• CNBC: ‘Stop the price gouging’: Biden hits corporations over high consumer costs. “Junk fees take real money out of the pockets of average Americans,” Biden said Monday. “They can add up to hundreds of dollars, weighing down family budgets and making it harder for families to pay their bills.” [11/27/23]

• AP: U.S. egg producers conspired to fix prices from 2004 to 2008, a federal jury ruled. An Illinois jury ruled this week that several major egg producers conspired to limit the U.S.’s supply of eggs in order to raise prices in a case stemming from a federal lawsuit originally filed 12 years ago. [11/22/23]

• CBS News: Pa. Sen. Bob Casey’s “greedflation” reports exposes consumer price gouging. The report notes that between 2020 and 2022 corporate profits rose by 75%, which he says is five times as fast as inflation…The report cited Federal Reserve findings that corporate profits accounted for all the inflation in the first year of pandemic recovery from July 2020-2021 and 41% of inflation overall in the first two years of post-pandemic recovery from July 2020-2022. [11/16/23]
• Vox: The problem isn’t inflation. It’s prices. On the consumer end, once companies increase a price for, say, shampoo or soda, they don’t often revise them back down. Corporations have been quite open that people are largely hanging with them on price increases over the past couple of years, which has allowed them to hike more. There isn’t much consumers can do about it. [11/14/23]