U.S. Corporate Profits Climbed as GDP Ticks Down to 1.1%
Source: The Wall Street Journal.
U.S. Corporate Profits Climbed as GDP Ticks Down to 1.1%
Key measure of corporate profits rose this spring alongside modest growth in the overall economy
By Ben Leubsdorf
ben.leubsdorf@wsj.com
http://twitter.com/BenLeubsdorf
Updated Aug. 26, 2016 10:49 a.m. ET
A key measure of corporate profits rose this spring for a second straight quarter alongside modest growth in the overall economy, though U.S. businesses remain under pressure from global weakness and other forces.
Corporate profits after tax, without inventory valuation and capital consumption adjustments, rose 4.9% from the prior quarter to a seasonally adjusted annual level of $1.627 trillion in the second quarter, the Commerce Department said Friday.
Profits had jumped 8.9% in the first three months of 2016, after dropping in three of the previous four quarters. Still, the trend remains weak and second-quarter profits were down 2.2% compared with a year earlier. An alternative measure, pretax profits with inventory valuation and capital consumption adjustments, declined 1.2% in the second quarter from the prior three months.
....
Overall economic growth remained subdued in the spring. Gross domestic product, a broad measure of goods and services produced across the economy, expanded at an inflation-adjusted 1.1% seasonally adjusted annual rate in the second quarter, according to Fridays report. That is down slightly from last months initial estimate of a 1.2% growth pace.
Read more: http://www.wsj.com/articles/u-s-corporate-profits-rise-as-gdp-ticks-down-to-1-1-1472214856
saidsimplesimon
(7,888 posts)a piece of truth, it frightens me. What is the motive, I ask?
progree
(10,864 posts)from the planet Zirnon 7
Yo_Mama
(8,303 posts)Obviously, at some time the inventory will need to be replenished.
This looks like an impending recession to me:
https://fred.stlouisfed.org/series/CBI
whatthehey
(3,660 posts)The implication of the headline writer, blunt enough to be likely intentional, is that profits went up as GDP declined. All that declined was the rate at which GDP was also going up.
progree
(10,864 posts)Reuters says:
http://finance.yahoo.com/news/declining-inventories-curb-u-second-quarter-growth-consumption-130932108--business.html
AFP says:
http://finance.yahoo.com/news/us-economy-grew-modest-1-1-second-quarter-004311322.html
Commerce Dept says:
consumption adjustment [CCAdj]) decreased $24.1 billion in the second quarter, in contrast to an
increase of $66.0 billion in the first.
http://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
In contrast, Wall Street Journal says (from the OP excerpt):
Profits had jumped 8.9% in the first three months of 2016, after dropping in three of the previous four quarters. Still, the trend remains weak and second-quarter profits were down 2.2% compared with a year earlier. An alternative measure, pretax profits with inventory valuation and capital consumption adjustments, declined 1.2% in the second quarter from the prior three months.
I wonder how many measures of corporate profit there are? From which to pick and choose to present a positive or negative picture
mahatmakanejeeves
(56,897 posts)progree
(10,864 posts)http://finance.yahoo.com/news/stocks-rising-early-trading-following-135947543.html
and down 5 quarters in a row if looking at year-over-year numbers. And it looks like expectations are for a decline in Q3 yoy (Q3 2016 vs. Q3 2015), to make it 6 such quarters in a row.
http://www.democraticunderground.com/?com=view_post&forum=1014&pid=1548027