Business

GDP, corporate profits soar as Biden calls out companies for ‘price gouging’ on November 30, 2023 at 11:00 am Business News | The Hill

Published

2 years ago

November 30, 2023

The American economy grew in the third quarter, but there are signs that its growth is beginning to slow.

U.S. gross domestic product (GDP) came in Wednesday at a revised 5.2 percent increase in the third quarter, higher than the 4.9 percent pop of the initial estimate, to hit the fastest quarterly rate of growth in almost two years.

Corporate profits increased by $105.7 billion in the third quarter, compared to $6.9 billion in the second, the Commerce Department reported Wednesday.

What that 5.2 percent GDP number means

The latest GDP number is the highest since the fourth quarter of 2021, when it hit 7 percent and the economy was still seeing explosive quarterly growth in the recovery from pandemic shutdowns.

Despite consecutive quarters of negative growth in the first half of 2022, a strong job market and consumer spending pushed the economy out of recession range.

A major contraction predicted by many following the booming recovery has yet to materialize, adding to the likelihood that the economy could achieve a “soft landing” on a path to more regular growth.

Consumer spending continues to heat up

Personal consumption expenditures increased 3.6 percent in the third quarter, up from 0.8 percent in the second quarter, with advances in both goods and services spending.

Spending was up notably in recreational goods and vehicles and in recreational services, such as concerts and movies.

“The increase in real GDP reflected increases in consumer spending [and] private inventory investment,” the Commerce Department noted.

Corporate profits come in for rough criticism

Earlier this week, President Biden called out the role of private-sector profit-gouging in inflation.

“Let me be clear,” he said Monday. “To any corporation that has not brought their prices back down, even as inflation has come down, even supply chains have been rebuilt — it’s time to stop the price gouging, [give] the American consumer a break.”

Upward revisions to fixed capital investments and state and local government spending drove the higher GDP number, while robust consumer spending was marked down slightly in the third quarter to a 3.6-percent increase.

“Economic growth was even better than expected in the third quarter, with real GDP rising 5.2 percent versus the advance estimate of 4.9 percent. The additional boost came from 2 sources: investments and government spending,” Sonu Varghese, a strategist at Carson Group, said in an analysis.

Gross domestic income (GDI), an inverse measure of economic productivity, came in at a more modest 1.5 percent. The average of real GDP and real GDI advanced 3.3 percent in the third quarter, up from 1.3 percent in the second.

Profits fly high while consumers face prices

While companies rake in massive profits, consumers are being hammered by prices that are as much as 20 percent higher than they were before the pandemic.

“Pandemic-era supply chain disruptions enabled corporations to hike prices and juice profit margins to highs not seen in more than 60 years,” Kitty Richards, director of Groundwork Collaborative, an economic research and advocacy group, wrote in an analysis.

“Now supply chains have returned to normal, but corporations in many sectors are still charging inflated prices and extracting exorbitant profit margins,” Richards said.

Corporate profits are now at the highest share of national income in more than 10 years.

“This means the labor share remains flat or declining, depending on the measure you use, in the third quarter. There’s still room to grow back to more historical ranges during this recovery,” Mike Konczal, director of macroeconomic analysis at the Roosevelt Institute, another research and advocacy organization, wrote.

“[It’s] good reason for the President to be flagging corporate profits alongside high prices,” he added.

Sixty percent of Americans say their income hasn’t kept pace with increases in daily expenses over the past year, according to research released Wednesday by market data company Bankrate. That’s up from 55 percent last year.

“Twenty-nine percent say their pay has kept up, compared to 33 percent last year. Older workers, lower income earners, and hourly workers are more likely to say their pay has not kept up with inflation,” the Bankrate analysis found.

The recession that won’t materialize

The latest GDP numbers come after a deluge of recession predictions from market commentators, economists and even authorities like the Federal Reserve, which forecast a “mild recession” earlier this year before scrapping that call at a later meeting.

“A US recession is effectively certain in the next 12 months,” economists with Bloomberg Economics wrote in October 2022.

The company’s recession probability model “forecast a higher recession probability across all timeframes, with the 12-month estimate of a downturn by October 2023 hitting 100 percent.”

Harvard University economist Larry Summers said last year that unemployment would need to skyrocket in order to tame inflation before eventually conceding that “transitory factors” contributing to inflation were easing.

Robust consumer spending, a red hot job market, knock-on effects from $1 trillion in pandemic stimulus, as well as longer-term investments spurred by big pieces of legislation have likely all been working in the opposite direction from a downturn, to varying degrees.

Inflation is coming down but pre-pandemic prices are likely gone forever

The pace of price increases in the economy has come down over the past year, and in a few sectors, such as durable goods, price levels have deflated. Annual price increases topped out at 9 percent last June and are now at 3.2 percent, according to the Labor Department’s consumer price index (CPI).

But price levels in absolute terms are still way higher than they were before the pandemic and have little chance of returning to their pre-pandemic norms.

An analysis released this week by Bloomberg Economics found that prices are an average of 20 percent higher across the economy than they were in January 2020.

Rent is up 20 percent, groceries are up 25 percent, electricity is up 25 percent, car insurance is up 33 percent and water is up 16 percent, the analysis found.

Dubbing it a “cost-of-living squeeze,” economists noted that “after accounting for inflation, hourly wages have barely budged since 2020.”

Cost-of-living stresses could be driving poor polling performance

Despite many strong metrics in the national accounting, ranging from consumer spending to the labor market, Americans are disapproving of President Biden’s handling of the economy.

Just 32 percent of respondents said Biden is handling the economy well, according to polling released Tuesday by Gallup.

Slightly stronger marks came in earlier this month from the Harvard CAPS-Harris poll.

That poll found that 44 percent of Americans approved of Biden’s economic stewardship, an increase from 41 percent last month.

White House spokesperson Karine Jean-Pierre echoed Biden’s remarks on the effect of profits and price-gouging on inflation Wednesday.

“Many corporations [have seen] input costs grow more slowly or even fall recently. Some companies are passing those savings on to consumers, but some aren’t,” she said.

“Companies should pass those savings on to consumers by lowering their high markups from the last two years,” Jean-Pierre said. “That’s why taking on price gouging has been part of the President’s economic agenda for more than two years now.”

The market has already priced in rate cuts

Wall Street is already pricing in rate cuts, meaning that the path to more regular growth following the recovery from the pandemic may already be laid out.

This would imply that the soft landing scenario desired by policymakers is already coming to pass.

On Monday, the Wall Street Journal reported that interest-rate futures were at 60-40 odds that “the Fed will lower rates by a quarter-of-a-percentage point by its May 2024 policy meeting.”

That’s up from 29 percent at the end of October, according to CME Group data, the Journal reported.

The U.S. central bank, in its latest summary of economic projections, is still officially predicting one more quarter-point rate hike this year, to max out at a range of 5.5 percent to 5.75 percent.

Administration, Business, News, Policy, corporate profits, GDP, gdp report, inflation, prices, Recession, recession fears The American economy grew in the third quarter, but there are signs that its growth is beginning to slow. U.S. gross domestic product (GDP) came in Wednesday at a revised 5.2 percent increase in the third quarter, higher than the 4.9 percent pop of the initial estimate, to hit the fastest quarterly rate of growth…

Business

How Trump’s Tariffs Could Hit American Wallets

Published

3 days ago

July 11, 2025

Bolanle Media Staff

As the debate over tariffs heats up ahead of the 2024 election, new analysis reveals that American consumers could face significant financial consequences if former President Donald Trump’s proposed tariffs are enacted and maintained. According to a recent report highlighted by Forbes, the impact could be felt across households, businesses, and the broader U.S. economy.

The Household Cost: Up to $2,400 More Per Year

Research from Yale University’s Budget Lab, cited by Forbes, estimates that the average U.S. household could pay an additional $2,400 in 2025 if the new tariffs take effect and persist. This projection reflects the cumulative impact of all tariffs announced in Trump’s plan.

Price Hikes Across Everyday Goods

The tariffs are expected to drive up consumer prices by 1.8% in the near term. Some of the hardest-hit categories include:

Apparel: Prices could jump 37% in the short term (and 18% long-term).
Footwear: Up 39% short-term (18% long-term).
Metals: Up 43%.
Leather products: Up 39%.
Electrical equipment: Up 26%.
Motor vehicles, electronics, rubber, and plastic products: Up 11–18%.
Groceries: Items like vegetables, fruits, and nuts could rise up to 6%, with additional increases for coffee and orange juice due to specific tariffs on Brazilian imports.

A Historic Tariff Rate and Economic Impact

If fully implemented, the effective tariff rate on U.S. consumers could reach 18%, the highest level since 1934. The broader economic consequences are also notable:

GDP Reduction: The tariffs could reduce U.S. GDP by 0.4% annually, equating to about $110 billion per year.
Revenue vs. Losses: While tariffs are projected to generate $2.2 trillion in revenue over the next decade, this would be offset by $418 billion in negative economic impacts.

How Businesses Are Responding

A KPMG survey cited in the report found that 83% of business leaders expect to raise prices within six months of tariff implementation. More than half say their profit margins are already under pressure, suggesting that consumers will likely bear the brunt of these increased costs.

What This Means for Americans

The findings underscore the potential for substantial financial strain on American families and businesses if Trump’s proposed tariffs are enacted. With consumer prices set to rise and economic growth projected to slow, the debate over tariffs is likely to remain front and center in the months ahead.

For more in-depth economic analysis and updates, stay tuned to Bolanlemedia.com.

Business

U.S. Limits Nigerian Non-Immigrant Visas to Three-Month Validity

Published

4 days ago

July 9, 2025

Bolanle Media Staff

In July 2025, the United States implemented significant changes to its visa policy for Nigerian citizens, restricting most non-immigrant and non-diplomatic visas to a single entry and a maximum validity of three months. This marks a departure from previous policies that allowed for multiple entries and longer stays, and has important implications for travel, business, and diplomatic relations between the two countries.

Key Changes in U.S. Visa Policy for Nigerians

Single-Entry, Three-Month Limit: As of July 8, 2025, most non-immigrant visas issued to Nigerians are now valid for only one entry and up to three months.
No Retroactive Impact: Visas issued prior to this date remain valid under their original terms.
Reciprocity Principle: The U.S. cited alignment with Nigeria’s own visa policies for U.S. citizens as the basis for these changes.
Enhanced Security Screening: Applicants are required to make their social media accounts public for vetting, and are subject to increased scrutiny for any signs of hostility toward U.S. institutions.

Rationale Behind the Policy Shift

Security and Immigration Integrity: The U.S. government stated the changes are intended to safeguard the immigration system and meet global security standards.
Diplomatic Reciprocity: These restrictions mirror the limitations Nigeria imposes on U.S. travelers, emphasizing the principle of fairness in international visa agreements.
Potential for Further Action: The U.S. has indicated that additional travel restrictions could be introduced if Nigeria does not address certain diplomatic and security concerns.

Nigeria’s Updated Visa Policy

Nigeria Visa Policy 2025 (NVP 2025): Introduced in May 2025, this policy features a new e-Visa system for short visits and reorganizes visa categories:
- Short Visit Visas (e-Visa): For business or tourism, valid up to three months, non-renewable, processed digitally within 48 hours.
- Temporary Residence Visas: For employment or study, valid up to two years.
- Permanent Residence Visas: For investors, retirees, and highly skilled individuals.
Visa Exemptions: ECOWAS citizens and certain diplomatic passport holders remain exempt.
Reciprocal Restrictions: Most short-stay and business visas for U.S. citizens are single-entry and short-term, reflecting reciprocal treatment.

Impact on Travelers and Bilateral Relations

Nigerian Travelers: Face increased administrative requirements, higher costs, and reduced travel flexibility to the U.S.
U.S. Travelers to Nigeria: Encounter similar restrictions, with most visas limited to single entry and short duration.
Diplomatic Tensions: Nigerian officials have called for reconsideration of the U.S. policy, warning of negative effects on bilateral ties and people-to-people exchanges.

Conclusion

The U.S. decision to limit Nigerian non-immigrant visas to three months highlights the growing complexity and reciprocity in global visa regimes. Both countries are tightening their policies, citing security and fairness, which underscores the need for travelers and businesses to stay informed and adapt to evolving requirements.

Business

Nicki Minaj Demands $200 Million from Jay-Z in Explosive Twitter Rant

Published

4 days ago

July 9, 2025

Bolanle Media Staff

Nicki Minaj has once again set social media ablaze, this time targeting Jay-Z with a series of pointed tweets that allege he owes her an eye-popping $200 million. The outburst has reignited debates about artist compensation, industry transparency, and the ongoing power struggles within hip-hop’s elite circles.

The $200 Million Claim

In a string of tweets, Minaj directly addressed Jay-Z, writing, “Jay-Z, call me to settle the karmic debt. It’s only collecting more interest. You still in my top five though. Let’s get it.” She went further, warning, “Anyone still calling him Hov will answer to God for the blasphemy.” According to Minaj, the alleged debt stems from Jay-Z’s sale of Tidal, the music streaming platform he launched in 2015 with a group of high-profile artists—including Minaj herself, J. Cole, and Rihanna.

When Jay-Z sold Tidal in 2021, Minaj claims she was only offered $1 million, a figure she says falls dramatically short of what she believes she is owed based on her ownership stake and contributions. She has long voiced dissatisfaction with the payout, but this is the most public—and dramatic—demand to date.

Beyond the Money: Broader Grievances

Minaj’s Twitter storm wasn’t limited to financial complaints. She also:

Promised to start a college fund for her fans if she receives the money she claims is owed.
Accused blogs and online creators of ignoring her side of the story, especially when it involves Jay-Z.
Warned content creators about posting “hate or lies,” saying, “They won’t cover your legal fees… I hope it’s worth losing everything including your account.”

She expressed frustration that mainstream blogs and platforms don’t fully cover her statements, especially when they involve Jay-Z, and suggested that much of the coverage she receives is from less reputable sources.

Satirical Accusations and Industry Critique

Minaj’s tweets took a satirical turn as she jokingly blamed Jay-Z for a laundry list of cultural grievances, including:

The state of hip-hop, football, basketball, and touring
The decline of Instagram and Twitter
Even processed foods and artificial dyes in candy

She repeatedly declared, “The jig is up,” but clarified that her statements were “alleged and for entertainment purposes only.”

Political and Cultural Criticism

Minaj also criticized Jay-Z’s political involvement, questioning why he didn’t campaign more actively for Kamala Harris or respond to President Obama’s comments about Black men. While Jay-Z has a history of supporting Democratic campaigns, Minaj’s critique centered on more recent events and what she perceives as a lack of advocacy for the Black community.

The Super Bowl and Lil Wayne

Adding another layer to her grievances, Minaj voiced disappointment that Lil Wayne was not chosen to perform at the Super Bowl in New Orleans, a decision she attributes to Jay-Z’s influence in the entertainment industry.

Public and Industry Reaction

Despite the seriousness of her financial claim, many observers note that if Minaj truly believed Jay-Z owed her $200 million, legal action—not social media—would likely follow. As of now, there is no public record of a lawsuit or formal complaint.

Some fans and commentators see Minaj’s outburst as part of a larger pattern of airing industry grievances online, while others interpret it as a mix of personal frustration and performance art. Minaj herself emphasized that her tweets were “for entertainment purposes only.”

Conclusion

Nicki Minaj’s explosive Twitter rant against Jay-Z has once again placed the spotlight on issues of artist compensation and industry dynamics. Whether her claims will lead to further action or remain another dramatic chapter in hip-hop’s ongoing soap opera remains to be seen, but for now, the world is watching—and tweeting.