Due to constant customer purchases, the corporate sectors have derived huge profits amidst rising inflation. The consumer price index witnessed a 7.5% increase since last year. However, the energy and fuel sectors experienced a drop in prices. The inflation rate has been the highest since 1982. Vox reports that Starbucks enjoyed a 31 percent increase in annual profits till December 2021; Tyson Foods also hiked the prices by 19.6%, which fueled the company’s stock prices. The price rise combined with the pandemic has been a nightmare for the Americans. However, their purchases are still up.
Corporates take unfair advantage of the current market situation.
Several economists accuse these corporations of taking unfair advantage of price rise and customer needs. The disruption in the supply chain in various market sectors is the primary factor behind the uncontrolled price rise. The Biden Administration is under immense pressure to check the inflation rates and ease citizens’ survival. Various economists say that major corporates are hiking prices due to the absence of competitors; experts believe the businesses are charging customers more than necessary. The price rise picked pace in November last year, and the public is reeling. Several low-income families have fallen below the poverty levels in 2022. The lack of opposition allows corporations to exercise their will and gain high profits in the name of inflation.
Several factors have fueled inflation.
Vox quoted Biden; he said, “This isn’t a new issue. It’s not been the reason we’ve had high inflation today. It’s not the only reason. But, over time, it has reduced competition, squeezed out small businesses and farmers, ranchers, and increased the price for consumers.” The sharks of the market have driven the prices and fueled the market.
Vox quoted Gregory Daco, the chief economist at EY-Parthenon saing, “I think it’s nearly impossible to disentangle what is considered a natural if we can put that word here, a natural outcome from the Covid crisis, from the massive injection of fiscal stimulus that led to robust demand, or robust demand and recovery. And the fact that supply was slower to come back, versus an environment where market concentration is exacerbating these price pressures because a few dominating firms can do so.”