The surprising ability of US companies to restore their profitability
Since autumn 2020, US and European companies have faced the same shock: rising prices of commodities, semiconductors, maritime transport, etc. In response to this shock: In the United States, companies have raised their prices to the point that their profit margins and overall profitability have increased despite the increase in their costs; In the euro zone, companies have been unable to raise their prices and profit margins and profitability have fallen. Companies therefore have much greater pricing power - the capacity to restore profitability by raising prices - in the United States than in the euro zone. In all likelihood, this stems from competition in goods and services markets being far weaker in the United States than in the euro zone.