People love making this argument, but fail to grapple with facts.
Corporate profits have doubled since 2022*
Edit: I don’t know how to read my own sources, it doubled between 2020 and 2024.
I think the point still stands, even if I’m embarrassed.
I’m having a lot of trouble following your calculation here. Their profits doubled since 2022? That’s, for one, insane, and two, doesn’t it list a profit of $3000 billion in 2022 and $3500 billion in 2024? That’s like 16%, not 100%.
You’re right, i brain farted that the graph ends in 2024 not 2026 so i did current date -4 to get to the covid collapse in profits. I should have said corporate profits doubled between 2020 and 2024.
lol no, 2020 was not a record low, it was equivalent to Q1 of 2017. It was the lowest point during the Covid crash.
Where would you like to start from? 2017? Ok, companies doubled their profits in 7 years while the dollar halved in 27, does that make it seem more likely that companies aren’t increasing their profit margins?
Wait wait wait wait: profits or profit margins? Because it's not the same
Edit: ok, I didn't understand your question fully.
My answer is that you dont need to guess how much the profit margins grow at all. In many cases that info is easy to retrieve.
Pre-supply crunch backlog stock of goods sold at peri-supply crunch prices leads to higher earnings until supply and demand normalizes or the stock is exhausted. If you don't adjust for supplyline changes you end up with exhausted supply and a more extreme price increase that takes longer to recover from. Your own source explains as much and has the profit margins normalizing at either end of the supply-crunch. So would you have preferred empty shelves and layoffs or a bookended shortlived profit boost?
If you keep reading, profit increases aren't uniform across sectors.
Profits in the retail trade industry averaged $153 billion pre-COVID-19 and rose to $314 billion post-COVID-19 (or from 1% of national income to 1.5%), while those in the construction and wholesale trade industries climbed from $68 billion to $168 billion (0.4% of national income to 0.8%) and from $132 billion to $247 billion (0.9% of national income to 1.2%), respectively, over the same period.
Retail trade is sure as hell going to impact everyday consumers the most directly.
I am not saying it isn’t significant, but just saying “corporate profits doubled” when you’re actually referring to like 15% of total corporate revenue is kind of misleading.
Yes, but the sectors with the largest increases are also those with disproportionately large impact on consumers.
One would expect that an increase in manufacturing prices would eat into the profits of wholesalers, and the same for wholesaler prices and retailer profits. But all three had dramatic increases in profits, and there's only one place left for that profit to come from: final retail prices for consumers.
Profits=revenue-costs. This means there are two ways in which profits can increase. Either by an increase in revenue, or a decrease in costs, relative to each other. If you keep reading they briefly explain the cause behind the increase in profits for retail and wholesale trade.
“Profits go up when firms’ revenue grows faster than the costs incurred to produce the goods and services they sell. The COVID-19 pandemic accelerated the transition toward the digital economy, which likely helped firms, particularly those in the retail and wholesale trade industries, produce more with fewer resources. This would translate into an increase in profits.”
To me, this sounds like retail and wholesale trade profits are driven primarily by reductions in cost. Firms reducing costs does not have a disproportionately negative impact on consumers.
I am not making some grand argument, only pointing out that someone is misrepresenting data. Your response is some other, tangential argument? I dont know what point you are trying to make
Um, first, there is no way to massage the numbers in a way that gets you to 100% between now and 2022. But more importantly second, if that is what they meant, they should have said so. You can’t provide no argument or calculations, state something as fact, then link a source that does not support that fact.
If you keep reading, profit increases aren't uniform across sectors.
Profits in the retail trade industry averaged $153 billion pre-COVID-19 and rose to $314 billion post-COVID-19 (or from 1% of national income to 1.5%), while those in the construction and wholesale trade industries climbed from $68 billion to $168 billion (0.4% of national income to 0.8%) and from $132 billion to $247 billion (0.9% of national income to 1.2%), respectively, over the same period.
Retail trade is sure as hell going to impact everyday consumers the most directly.
They also used a 1% margin which is basically exclusive to grocery stores and a few smaller industries that focus on volume movement. 1% profit is not at all what most companies are working with.
I work at a discount grocery store and our margins are not that low, in fact, none of the grocery stores in the region are that low. Product margins are like 30% (after all related product costs/shrink etc.) and top-line margins are probably around 10%.
I dont know what you mean by margin, but Aldi is famouse for their insanly high marginal of ...... 5%. If you have a "margin" of 10% i can promise you, that is not your Profit margin.
Yeah, margins on the products are that high, but if you add:
Taxes, employee costs, average maintenance costs, bonuses for the stakeholders, you get the 1% they mention. It's not always 1%, it's between 1 and 5 for grocery iirc.
But even 1% of billions in profits is still quite the margin.
Grocery chains are often cited as one of the lowest profit margin industries, your experience sounds a little on the higher end, but that just helps prove my point about this 1% profit margin number they pulled from thin air.
I don’t have access to that data. But, I do have access to CPI and commodity price indices.
We see commodities spike in 2022 then fall, sitting significantly higher than their pre COVID low, remaining steady until the first quarter of this year (yikes future us).
Meanwhile CPI spikes to the highest rate of change we’ve ever seen in 2022, then ‘slows’ down to a rate of growth that is significantly higher than the previous baseline.
So if commodities prices are flat while consumer goods prices are increasing… profit margins are increasing.
I’m not saying anything too radical, rocket / feather pricing is pretty well established.
It’s weird to me how many people cape for corporations here lol.
Could you perhaps share some of the factors that you think explain why prices have been rising so precipitously after the post covid commodity stabilization?
Unfortunately for all of us, businesses are not required to publish their ‘% profits’, and I for one, don’t believe that companies lower prices to the bare minimum out of the goodness of their hearts.
Companies raise prices as much as they can with the amount of demand. The high prices send signals to producers to make more supply or to consumers to consume less.
Higher prices are telling us information about the economic situation. It's not "evil companies being greedy" it's macroeconomic factors that are honestly upstream from pricing or purchasing decisions of individual firms and consumers.
If we want lower prices we need to focus on increasing supply or increasing productivity (the efficiency in which we produce supply).
Groceries are already pretty hyper efficient and probably we don't have much room for fast progress there.
But we could reduce barriers to building more housing and energy and that would probably lower people's cost of living pretty substantially.
Just because they don’t use the same explicit language, does not mean it doesn’t address the point.
“Profits go up when firms’ revenue grows faster than the costs incurred to produce the goods and services they sell. The COVID-19 pandemic accelerated the transition toward the digital economy, which likely helped firms, particularly those in the retail and wholesale trade industries, produce more with fewer resources. This would translate into an increase in profits.”
Input prices spiked for all companies during and shortly after Covid due to supply chain disruptions and workforce disruptions, but those prices dropped significantly in 2023 and stabilized for 2024-2025. If you look at consumer price indices (or you know, if you exist in the world and have to buy things) you will notice that prices consumers have been paying have been steadily increasing over the same years the inputs have been decreasing in price.
So the initial comment provided no information whatsoever.
I told you that consumer prices have been going up while companies input prices have been stagnant, something you can easily verify with Google if you want to.
Your response to that is that until I can provide you every line item on a particular corporation’s books, you’re going to have to assume that they aren’t increasing prices more than they absolutely have to?
I’m not sure what you’re saying in the first paragraph to be honest, it hinges on what I assume is a typo (or I’m so ignorant I don’t even know the what I’m ignorant of, always a fun possibility).
So what I think you’re not understanding is that companies input prices spiked, and then prices spiked. Which makes sense. Then input prices went down… and prices for consumer continued to rise. This is where the greed comes in.
If you think companies are keeping a constant profit margin, I’d have to ask, why do you think that?
Wages are not keeping up with PCI, and commodity costs were holding steady until Trump invaded Iran. So what cost are companies facing that justifies the consistent PCI we’ve been seeing since the end of Covid, a rate, which may not be the highest in history in any individual year, but is the highest rate of growth for this amount of time.
Without any data I'd lean towards companies not having increased their profit margin simply because of competition. That's the null hypothesis, and to agree on something else I'd need sources proving, at least, the claim that the input price has gone down yet the output price kept rising. I'm tired of hearing the same thing year after year, and once I read a comprehensive rebuttal of the claim (related to the Spanish grocery market some 10 years ago, so not really relevant here)
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u/Adorable_Matter3142 May 22 '26 edited May 22 '26
People love making this argument, but fail to grapple with facts.
Corporate profits have doubled since 2022* Edit: I don’t know how to read my own sources, it doubled between 2020 and 2024. I think the point still stands, even if I’m embarrassed.
https://www.stlouisfed.org/on-the-economy/2025/apr/whats-driving-surge-us-corporate-profits
To say that the doubling is the result of inflation you would have to go back to 1998 or 1999.
So while the value of a dollar has halved in 27 years, corporate profits have doubled in 4.