Corporate profits keep heading upward
In his latest dispatch to clients (no link) economist Ed Yardeni says:
US CORPORATE PROFITS: The corporate profits data released last week for the third quarter along with GDP in the National Income & Product Accounts (NIPA) confirm the remarkable rebound that's been evident in the S&P 500 earnings since early 2009. Profits' share of total National Income (NI) typically increases during economic recoveries. However, it has snapped back much faster than in the past, surpassing previous cyclical peaks. It is unlikely to rise much higher in 2012. However, profits may continue to rise along with National Income next year.
What about labor's share of NI? It's been going down for many years. The share of wages and salaries in NI fell below 50% for the first time on record during Q2-2010.
However, he adds, personal income has held up fairly well thanks to social payments such as unemployment insurance, Social Security etc.