Corporate profit hoarding might be the key to inflation

Consumer goods are still getting more expensive.

While most supply-chain disruptions of the last few years have waned, consumer goods are still getting more expensive. Some economists think that it could be due to corporate profiteering. Until major companies agree to cut better deals or sell cheaper goods, the economy could remain unbalanced indefinitely. 

Rising costs, soaring profit margins
A new paper from researchers at the University of Massachusetts Amherst calls this sellers’ inflation.

  • Bottlenecks (like supply-chain shortages) are giving companies “temporary monopoly” status, which makes it easier for them to raise prices. 
  • Some companies argue that their employees are forcing them to raise pay, which is forcing them to raise costs. But according to the report, workers are just asking to keep their pay comparable to the already rising cost of goods.

No relief for wallets anytime soon
If companies don’t lower their prices, consumers may have to cut back even further — or rack up untenable amounts of debt to pay for the everyday goods they need to survive.