Although companies blame higher worker pay for surging consumer prices, their profits tell a different story.
all up sharply. That's adding about 2 percentage points to overall inflation, said Ryan Sweet, senior director of economic research at Moody's Analytics.
In such an economy, workers were able to bargain for more pay, and the costs of labor rose in tandem with the costs of other inputs, explained Josh Bivens, research director of the left-leaning Economic Policy Institute.
"There are certain goods and services that are very noticeable to consumers, and they notice when those prices go up. The price of things at McDonalds or Chipotle — people tend to internalize that pretty fast," said Barclays' Millar.If wages aren't the primary reason prices have soared, why are consumers paying more for everything from food to rent? One key factor that companies tend not to publicize: higher corporate profits.
"Higher prices mean somebody is collecting more income. Over the past year, it has been employers in sectors where supply has been impaired — shipping companies, oil producers and food wholesalers, for example — who are collecting the extra revenue coming in through higher prices," Bivens wrote.
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