Rotation in corporate behavior - from pricing power to expense management

The chart above that mentions the term pricing power and expense management during earnings calls for the S&P 500 companies shows a significant change in corporate behavior. During the surge in inflation, consumers were not able to distinguish a general price increase versus a local price increase. The inflation noise allowed firms to increase prices as more money was chasing fewer goods. See the surge in pricing power in 2022. Now, we are returning to a more normal environment where expense management is more dominant. In fact, firms are now more expense focused than at any time over the last decade.  This usually occurs when growth is slowing.