Thursday, Oct. 3, 2024
Was half of recent inflation caused by corporate greed?
Economists say corporate price markups are not a major cause of inflation.
The greed claim was made Sept. 27, 2024, by Democrat Kristin Lyerly. She is challenging Republican Tony Wied for an open Green Bay, Wisconsin-area U.S. House seat.
Lyerly’s campaign cited a report by the progressive think tank Groundwork Collaborative. It accused corporations of “gouging consumers,” claiming profits drove 53% of inflation in mid-2023.
The libertarian Cato Institute criticized the report’s methodology. Economists disagree with its conclusion.
The Federal Reserve Bank of San Francisco said that since the COVID-19 pandemic, price markups have risen substantially in areas such as motor vehicles and petroleum, but overall, markups remained flat and have not been a main inflation driver.
Economists told PolitiFact rising costs for goods, labor and real estate are the main inflation drivers. Trillions in COVID stimulus, near-zero interest rates and the Russia-Ukraine war were also factors.
This fact brief is responsive to conversations such as this one.
Sources
- WBAY TV-2 | Green Bay, WI Dr. Kristin Lyerly and Tony Wied in the 8th Congressional District debate on WBAY TV-2
- New York Times I Listened In on Big Business. It’s Profiting From Inflation, and You’re Paying for It.
- Groundwork Collaborative Inflation Revelation: How Outsized Corporate Profits Drive Rising Costs
- Cato Institute New Nonsense on Profit-Driven Inflation
- Federal Reserve Bank of San Francisco Are Markups Driving the Ups and Downs of Inflation?
- PolitiFact Sen. Bob Casey said ‘prices are up’ because of ‘scheming’ corporations, but many economists disagree
- PolitiFact Corporate profits do not drive inflation, but inflation boosts company profits
- CNN The truth behind Harris’ inflation and corporate greed claims
- American Institute for Economic Research Fact-Checking “Greedflation”
About fact briefs
Fact briefs are bite-sized, well-sourced explanations that offer clear "yes" or "no" answers to questions, confusions, and unsupported claims circulating online. They rely on publicly available data and documents, often from the original source. Fact briefs are written and published by Gigafact contributor publications.
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