> But it is really just the consumer facing prices that go up. A lot of inflation is profit taking on the corporate side.
The US CPI went up 21.9% over the past 5 years[0]. The PPI went up 27.3% over the same timeframe[1]. So it's untrue that it's just the consumer-facing prices that have gone up; the producer-facing prices went up even more.
Corporate profit margins are high compared to historical averages, and total corporate profits went up by 40.7% over the past 5 years[2]; but the money supply went up by even more, by 47.1%[3]. So perhaps it's fair to say that businesses have been good at capturing the bulk of the additional money supply. Real (as in inflation-adjusted) personal incomes went up 9.4% over the same timeframe[4].
Consumer behavior was in turbocharged spending mode, fueled by rock-bottom interest rates and fiscal largesse. When supply remains constrained and demand goes through the roof, prices rise. Nothing too mysterious there.
The US CPI went up 21.9% over the past 5 years[0]. The PPI went up 27.3% over the same timeframe[1]. So it's untrue that it's just the consumer-facing prices that have gone up; the producer-facing prices went up even more.
Corporate profit margins are high compared to historical averages, and total corporate profits went up by 40.7% over the past 5 years[2]; but the money supply went up by even more, by 47.1%[3]. So perhaps it's fair to say that businesses have been good at capturing the bulk of the additional money supply. Real (as in inflation-adjusted) personal incomes went up 9.4% over the same timeframe[4].
Consumer behavior was in turbocharged spending mode, fueled by rock-bottom interest rates and fiscal largesse. When supply remains constrained and demand goes through the roof, prices rise. Nothing too mysterious there.
[0]: https://fred.stlouisfed.org/series/CPIAUCSL
[1]: https://fred.stlouisfed.org/series/PPIACO
[2]: https://fred.stlouisfed.org/series/CP
[3]: https://fred.stlouisfed.org/series/M2SL
[4]: https://fred.stlouisfed.org/series/W875RX1