'Greedflation' could be causing latest inflation wave, economist says

[ck4829]

Although US consumer prices provided further signs of relief for consumers in April, there are still factors keeping inflation elevated — and corporations may be reaping the benefits of that.

"We've had a really unfortunate situation where we've had three very, very different inflation waves caused by very different things," UBS Global Wealth Management Chief Economist Paul Donovan told Yahoo Finance (video above). "And they've just come one after the other. So it looks like you've had this continuous period of inflation."

...

That was followed by a second wave of supply-led inflation, he added, "and that was the energy shock coming out of the war in Ukraine." And then "the third wave of inflation — the one we're getting now — is this unusual profit-led inflation story."

Sometimes called "excuseflation" or "greedflation," profit-led inflation occurs when consumer-facing companies toward the end of the supply chain persuade shoppers to accept price hikes by pointing to plausible explanations (such as historically-elevated inflation). However, Donovan said, the true reason for these elevated prices could have more to do with expanding margins and keeping investor sentiment high than with increased input costs.

https://www.yahoo.com/finance/news/the-us-is-now-facing-a-third-inflation-wave-economist-explains-075029389.html

[2naSalit]

1. I think...

There's no question about it.

[TreasonousBastard]

2. Everyone, especially economists, forgets that a fundamental...

of capitalism is to charge As much as you can.

[Skittles]

3. file that under NO SHIT

argh

[underpants]

4. We didn't really think they were going to let all that 2020 money of theirs stay in our pockets

did we?

This has been the main component of inflation for the last couple years. I saw the number at 54%.

[DFW]

5. At some point there has to be some push-back from the public

I make a distinction when I'm in the States--on vacation on Cape Cod, for example, I know there will be collusion among the retailers of food, since they have about 3 months to make 90% of the money they need for their year's business to survive. But when I'm back in Dallas or with my brother in Virginia, we just pass on stuff we think is outrageous. He shops at Costco and compares specials offered by local food shops. He is now retired, and while not hurting, he sees no reason to toss money out the window, and into the hands of the retailers. Those who don't have that option are screwed, but those who do will (or should) make use of it, especially if they have the time to comparison shop.

[Otto_Harper]

6. There are subtle ways they exploit this principle, such as the jug of windshield washer fluid

that I came across. The label was proudly emblazoned "Protects Down to 32F". In other words, they were selling you a gallon of water with a little blue coloring in it, and maybe, just maybe, a drop of dish soap. For a buck or two.

[jimmy the one]

7. 10% inflation: $1.00 a year ago, $1.10 today, not the problem

A ten percent annual inflation rate, which was about the highest inflation got last year, means that on average - ON AVERAGE - things that cost $1.00 a year ago, would cost $1.10 today., a mere dime more. That would have been a shoulder shrug to most all of us, like gasoline going from $2.00 per gallon up to $2.20, a typical fluctuation.
Ten percent inflation, as awful as it was portrayed, is not really the problem, but only a temporary bug. Gasoline did not go up to only $2.20. but to $4.50, over 100% increase, not just 10%. Staples like milk bread meat egg prices rose from 35% to 200%. That is not 10% inflation it is price gouging.
I shop at walmart grocery regularly, and last year on a supply run I bought a loaf of home made bread for $1.00, then 2 weeks later on next supply run it had risen to $1.47. That is a 47% increase in a half month. That was not normal inflation, but price gouging and attributing it to inflation to avoid backlash. BTW I stopped buying that bread.

article: .. the true reason for these elevated prices could have more to do with expanding margins and keeping investor sentiment high than with increased input costs.

[Scrivener7]

8. Yay! Someone actually looking at it and giving it a catchy name! I bet

the catchy name gets more media people talking about it. Sad, but likely.

[Valdosta]

9. It is an effect of inflation not a cause.

Inflation == increase in the money supply. All else is effect not cause.

Why suppose the Federal Reserve Banks are not on the side of big corporations?

[AllaN01Bear]

10. always has been.