The Economy Stinks, but at Least Corporate Profits Are at 60-Year Highs!

Today's middling economic growth report confirmed what many had already expected: The U.S. has been slowing down. The economy expanded at a laggardly 1.5 percent annual rate, down from 2 percent in the first quarter. Less expected was some of the news about the last few years of corporate profits, which were revised down for the last several years. By one pre-tax measure, they were 6 percent lower in 2011 and 5.4 percent lower in 2010. The New York Times speculates that the figures "might modify" public perception about how fast companies have bounced back.

It shouldn't really. Yes, corporate America has been billions of dollars poorer than we previously thought. But profits, as shown in the graph below, have still rebounded to all-time highs during the past few years.

Corporate_Profits_FRED.PNG

As a share of gross domestic product, corporate profits hit a 60-year peak at the end of 2011. They're currently just a shade 2006 levels. You'd have to time-travel back to the Eisenhower administration to find an era when companies' pre-tax earnings made up a larger share of the economy. 

Corporate_Profits_Share_of_GDP_FRED.PNG

So yes, corporate America hasn't fared quite as well post-recession as we had thought. But it's collective bottom line truly is doing just fine. 

Presented by

Jordan Weissmann is a senior associate editor at The Atlantic.

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we still save the night sky?

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we still save the night sky?

Video

The Faces of #BlackLivesMatter

Scenes from a recent protest in New York City

Video

Desegregated, Yet Unequal

A short documentary about the legacy of Boston busing

Video

Ruth Bader Ginsburg on Life

The Supreme Court justice talks gender equality and marriage.

Video

Social Media: The Video Game

What if the validation of your peers could "level up" your life?

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Business

Just In