November 25, 2020

Corporate profits from current production (corporate profits before tax with inventory valuation and capital consumption adjustments) rose by $495.3 billion which works out to an annualized growth rate of 27.1% after having declined 10.3% in the second quarter and 12.0% in the first quarter.  During the last year profits on this basis have risen 3.3%.  Corporate profits in the third quarter are at a record high level.  The IVA and CC adjustment deals with the difference in depreciation allowances used for accounting and income tax purposes.

Following  the 31.4% decline in GDP in the first quarter GDP surged by 33.1% in Q3 and we expect it to climb at a 10.0% pace in Q4.  In each of those quarters corporate profits should continue to climb.

Stephen Slifer

NumberNomics

Charleston, SC