top of page
  • 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.

174 views1 comment

Recent Posts

See All

The Fed At "War" With Itself

The Fed is at "war" with itself. It says one thing when appropriate and helpful for its communication strategy and then ignores it or says the opposite when it isn't consistent with its message or sup

1 Comment

Aaron Schindler
Aaron Schindler
Mar 30, 2023

Great blog, Joe! Do you watch the velocity of money? Based on the quantity theory of money (money supply × velocity of money = price level × real GDP), changes in velocity are directly proportional to the inflation rate. It's reported with a lag, but this morning's latest report on velocity shows that it seems to be accelerating: Velocity of M2 Money Stock (M2V) | FRED | St. Louis Fed ( I agree that the Fed has more than one additional rate rise up its sleeve.

bottom of page