US Corporate Profit Margins Are Coming Back Down To Earth

May 29, 2015

By Knowledge Leaders Team in News

Today wasn’t the best day for US economic releases. The 2nd revision of 1Q GDP was (unsurprisingly) revised down from 0.2% to -0.7%. The release that caught our eye, however, was the initial release of corporate profits in the US for the first quarter. After-tax corporate profits did rise by 2.7% year-over-year in the first quarter but this was on the heels of the 2014 4Q revision that reduced the growth rate of corporate profits from +2.9% to -2.5% during that quarter. Corporate profit margins have now dropped below 8% for the first time since 2009. Margins, as measured by after-tax profits divided by nominal GDP, hit an all-time record of 10.06% in 4Q2011. Margins have since steadily fallen to the its current level of 7.97%.

Tags > corporate profits, Economy, United States

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