Rising rates and the inflation storm had no impact on margins for U.S. companies.
Hypothesis: Margin Impact of Rising Costs
One hypothesis for 2021 - 2022 was that frontal cost inflation at all levels (raw materials, intermediate products, labor, rising interest costs) would reduce business margins, which would create a breach in the system, triggering crisis processes.
Reality Check: U.S. Companies' Operating Margins
The reality turned out to be different. The operating margin of the largest non-financial companies in the US is 11.2%. That's quite a lot, as the average margin from 2017 - 2019 was 10.5% (now 6.3%, or 0.8 pp higher), the margin was 11% from 2012 - 2016, and the same from 2010 - 2019. Much of the operating margin growth is driven by technology companies.
Excluding technology companies, operating margins are at 2014 levels and markedly lower than in 2004 through 2007, but higher than in any period from 2015 through 2019.
Retrospective Assessment
Overall, nothing outstanding in retrospect. It's more about maintaining the same efficiency, but in a crisis - no negative realization here, at least under the hypothesis of margin collapse due to inflation and Fed action.
How can efficiency be preserved? This is a topic for a separate study, but for now we can say that we have managed to preserve efficiency.
Conclusion
In conclusion, despite concerns about rising rates and inflation, U.S. companies maintained strong operating margins, notably at 11.2%. This performance, driven in part by technology companies, belied expectations of a margin collapse between 2021 and 2022. Even when excluding technology companies, operating margins remain stable and resemble 2014 levels. This indicates that efficiency has been successfully maintained in the face of the crisis, thus disproving the initial hypothesis. Further research is needed to understand the strategies underlying this resilience.