The End Of The Profits Recession?

The burden of the sharp slowdown in nominal growth since the middle of 2014 has been borne disproportionately by corporate America. Between Q3 of that year and Q2 of this year, the year-on-year (y/y) growth rate of gross disposable income (GDI) has fallen from 5.6% to just 2.4%, while the y/y growth rate of the corporate profits of domestic industries (after inventory valuation and capital consumption adjustments, as well as taxes) has plunged from 8.7% to -9.8%. Over the corresponding period, the y/y growth rate of the compensation of employees has also decelerated, but much more mildly, from 4.7% to 3.8%. This was sufficient to send the four-quarter moving average (4-qma) of the corporate profit share in Q2 (the ratio...