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  • Writer's pictureJoe Carson

Near-Record High Real Profit Margins Indicate Fed Has A Lot More Work To Do

Nonfinancial Companies' real profit margins at 15.4% for Q4 2022 were unchanged from one year ago. That's a remarkable performance because companies could navigate a rising rate environment and wage pressures and maintain near-record high margins. That also helps to explain why there has yet to be a significant rise in the unemployment rate-- -no need to get rid of people with near-record high profits margins. The path to weaker labor markets and reduced inflationary pressures come from declining profit margins---the margin data indicates that the Fed has a lot more work to do.

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