In the first quarter of 2022, U.S. corporate profits fell by the most in almost two years, as inflation promised greater costs for companies while the economy took a step back. Adjusted pre-tax profits decreased by an annualized 2.3 percent from the prior quarter and were up 12.5 percent from a year earlier, Commerce Department data showed Thursday. At the same time, one measure of profit margins edged higher.

The report also showed that inflation-adjusted GDP decreased at a 1.5 percent annualized rate in the January-to-March period, compared with an initially reported 1.4 percent decline. Consumer spending, which accounts for the majority of the economy, grew an upwardly revised 3.1 percent.

Faced with rising costs for materials, shipping, and labor, many companies have sought to pass along those expenses to customers through higher product prices. However, input costs keep rising, and consumers are grappling with decades-high inflation.