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mahatmakanejeeves

(56,897 posts)
Fri Aug 26, 2016, 12:00 PM Aug 2016

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 Friday’s report. That is down slightly from last month’s 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

7 replies = new reply since forum marked as read
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progree

(10,864 posts)
4. Dunno. I don't read the WSJ because it is pay-walled, so it might as well be a publication
Fri Aug 26, 2016, 01:53 PM
Aug 2016

from the planet Zirnon 7

Yo_Mama

(8,303 posts)
2. Profits didn't really rise - the apparent profit is due to selling down inventory
Fri Aug 26, 2016, 12:20 PM
Aug 2016

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)
3. Somebody missed that this is still GDP growth
Fri Aug 26, 2016, 12:42 PM
Aug 2016

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)
5. Hmm. in these presentations, corporate profits fell in Q2, and AFP sez down 4.9% from a year earlier
Fri Aug 26, 2016, 02:08 PM
Aug 2016

Reuters says:

The government also reported that after-tax corporate profits fell at a 2.4 percent rate last quarter after increasing at an 8.1 percent pace in the first quarter.
http://finance.yahoo.com/news/declining-inventories-curb-u-second-quarter-growth-consumption-130932108--business.html


AFP says:
In the same report, the department said that US corporate profits fell by $24.1 billion in the second quarter after a $66 billion increase in the first, and were down 4.9 percent from a year earlier.
http://finance.yahoo.com/news/us-economy-grew-modest-1-1-second-quarter-004311322.html


Commerce Dept says:
Profits from current production (corporate profits with inventory valuation adjustment and capital
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):
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.


I wonder how many measures of corporate profit there are? From which to pick and choose to present a positive or negative picture

progree

(10,864 posts)
7. Earnings per share of S&P 500 expected to fall for the fourth quarter in a row
Fri Aug 26, 2016, 03:20 PM
Aug 2016
PROFIT PICTURE: Earnings per share for companies in the S&P 500 index are expected to fall 1.8 percent in the second quarter, according to S&P Global Market Intelligence. That would be the fourth quarter in a row of drops.
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
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