4-22-2014
http://finance.yahoo.com/news/everyone-america-care-chipotle-netflix-105738858.html
Everyone In America Should Care About What Chipotle And Netflix Are About To Do
A Chipotle Mexican restaurant in midtown Manhattan, New York.
Job growth has been weak and wages have gone nowhere since the great recession.
But surprisingly, we've seen corporate profits recover swiftly and surge to record highs.
The labor-market story and the corporate-profit story are very closely related. Simply put, the American consumer has been getting squeezed to line the pockets of corporate America and its investors.
However, we're now seeing more evidence that businesses will attempt to bolster their profits by raising prices on their customers.
Chipotle and Netflix recently announced that they would soon be raising the prices of their goods and services.
Corporate Profit Margins Have Never Been Fatter
Much of these profit margin gains have come from companies cutting costs (for example, laying off workers) and improving efficiencies (like making workers produce more stuff with little or no pay raise).
Up front, most consumers may not even notice the price hikes because they're so small. But their capacity to spend will get squeezed.
And ultimately, without a jump in hiring or wages, this could all backfire on corporate America in the form of crumbling sales and collapsing profits.
http://finance.yahoo.com/news/everyone-america-care-chipotle-netflix-105738858.html
Everyone In America Should Care About What Chipotle And Netflix Are About To Do
A Chipotle Mexican restaurant in midtown Manhattan, New York.
Job growth has been weak and wages have gone nowhere since the great recession.
But surprisingly, we've seen corporate profits recover swiftly and surge to record highs.
The labor-market story and the corporate-profit story are very closely related. Simply put, the American consumer has been getting squeezed to line the pockets of corporate America and its investors.
However, we're now seeing more evidence that businesses will attempt to bolster their profits by raising prices on their customers.
Chipotle and Netflix recently announced that they would soon be raising the prices of their goods and services.
Corporate Profit Margins Have Never Been Fatter
Much of these profit margin gains have come from companies cutting costs (for example, laying off workers) and improving efficiencies (like making workers produce more stuff with little or no pay raise).
Up front, most consumers may not even notice the price hikes because they're so small. But their capacity to spend will get squeezed.
And ultimately, without a jump in hiring or wages, this could all backfire on corporate America in the form of crumbling sales and collapsing profits.
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