NEW YORK – Labor and raw materials costs are squeezing corporate profit margins in the United States, as prices received lag input costs.
Major US corporations raised prices fast enough during the first three quarters of 2021 to stay in front of the inflation wave, but rising costs, especially for labor, are now overtaking them.
This leaves the Federal Reserve in a quandary. Supply constraints are the main culprit in the present inflation wave, starting with labor. Two million Americans haven’t returned to the labor force after the Covid recession of 2020.