The Wall Street Journal provides an in depth peek at a first rate-third quarter.
Corporate profits continued to rebound last quarter alongside solid growth in the broader U.S. economy.
A key measure of after-tax earnings across U.S. corporations rose 5.2% in the third quarter from a year earlier, the Commerce Department reported Tuesday. That was the first annual increase since late 2014 and the strongest year-over-year growth since the fourth quarter of 2012.
Profit gains were reflected among large U.S. companies in most industry sectors as healthy consumer spending and other forces helped accelerate economic growth and set the stage for further expansion in the fourth quarter.
The U.S. is “the bright spot in the world right now,” Dow Chemical Co. Chief Financial Officer Howard Ungerleider told analysts Tuesday.
Corporate profits have been pressured in recent years by various forces including weak global growth, a strong dollar that damps demand for U.S. exports, and slumping commodity prices that battered the energy and agriculture sectors.
Large publicly traded U.S. companies posted their biggest percentage gains in profit since late 2014.
Business investment remains a weak spot for the economy. One measure of capital expenditures, fixed nonresidential investment, rose at a weak 0.1% pace last quarter versus an earlier estimate of 1.2% growth.
Consumer spending, which accounts for more than two-thirds of U.S. economic output, rose at a 2.8% annual rate in the third quarter.
Economic growth in the coming years could be boosted by fiscal stimulus, according to some forecasters. Republicans next year will control both Congress and the White House, and President-elect Donald Trump has said he hopes to enact an overhaul of the tax code and an infrastructure-investment program.
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