Mind The Margins: Rising Costs Are Fixing To Hammer Profits

A combination of so-called “demand pull” and “cost-push inflation” is sending up feedstock costs and interest expenses to levels that I believe will soon lead to a marked contraction in U.S. corporate profit margins.

In fact, we already saw this phenomenon in first-quarter earnings reports across a host of industries, from consumer-packaged goods to social media. While the cut in U.S. corporate-tax rates has mostly masked these drags and headwinds, the rising cost of everything will likely worsen in the year(s) to come.

 

 

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