Are 'gravity-defying' profit margins finally coming to an end? 💸

Arguably the most remarkable corporate trend of the pandemic 🤯

Profit margins have been trending higher. (Source: JPMorgan)

Despite rapidly rising costs, U.S. businesses have managed to operate with surprisingly fat profit margins.

Goldman Sachs analysts recently reiterated their expectation for S&P 500 companies to set a record high for net profit margins in 2022. It’s a surprising view that Wall Street has actually held for months.

How has this been possible? 🤨

Companies pulled this off by passing off those rising costs to their customers through higher prices, a phenomenon we were reminded of in last week’s hotter-than-expected consumer price index report.

Higher prices have caused business and consumer sentiment to plummet. But businesses and consumers keep buying, thanks to robust finances shored up during the pandemic.

But there certainly could’ve been more push back.