Groundwork’s Dr. Rakeen Mabud Reacts to August Inflation Report

September 13, 2022 Groundwork Collaborative

This morning’s Consumer Price Index (CPI) report shows inflation at 8.3% in August – compared to 8.5% in July – driven largely by decreasing gas prices. However, monthly inflation increased 0.1% in August, as declining gas prices were offset by price increases for food, shelter, and services. Core inflation, which excludes volatile gas and food prices, increased to 6.3% over the past year, above the 5.9% reported in July.

Groundwork’s Chief Economist Rakeen Mabud responded to today’s report with the following statement:

“Gas prices are down, pandemic supply chain snarls are starting to ease, and shipping costs are coming down for companies, but sky-high costs for food and shelter continue to slam family budgets. 

“These stubbornly high prices are no surprise given what we’re hearing on corporate earnings calls: Companies are determined to keep prices high because it means bigger profits for themselves and massive payouts to their shareholders. Policymakers must rein in the corporate profiteering that is driving painful prices and record profits.” 

Email press@groundworkcollaborative.org to speak to Dr. Mabud about today’s CPI report and go to endcorporateprofiteering.org to learn more about the link between corporate profiteering and stubbornly high prices. 


Food Companies Are Choosing to Keep Prices High – Despite Decreasing Costs

  • Kraft Heinz is looking forward to inflation going down so they can keep their price increases. Its CFO predicted the company’s margins would increase because “as we continue to price inflation, the inflation events that start to ease, that might put us in a better position for us to continue to recover the margin.” [7/27/22]
  • J.M. Smucker, the maker of Jif peanut butter and Folger coffee, is executing $1.2 billion worth of price increases, despite their input costs rising by less than $900 million. When the company’s CEO was asked about how they’re able to do this and keep selling their products, he touted the company’s outsized market power: “We do have a lot of confidence in our portfolio. And I think when you look at the results, particularly this quarter, 86% of our portfolio is growing or maintaining (market) share…” [6/7/22]
  • The CFO of popular snack brand Utz said: “Our actions around pricing and productivity have stickiness to them. While they address margin gaps in the near term, they will drive margin enhancement when inflation stabilizes.” [3/2/22]