Archive for the 'Corporate Profits' Category

GDP Growth Slows In Fourth Quarter

Real gross domestic product (GDP) increased 2.6 percent in the fourth quarter of 2013, according to the “third” estimate released by the Bureau of Economic Analysis. The growth rate was 0.2 percentage point more than the “second” estimate released in February. In the third quarter, the growth rate was 4.1 percent.

Fourth-quarter GDP highlightsGDP_4q_3rd_2013
Consumer spending rose 3.3 percent, the highest since the fourth quarter of 2010, reflecting spending on housing and utilities, health care, and food services and accommodations. In the  third quarter, consumer spending rose 2.0 percent. Exports also accelerated in the fourth quarter.

These accelerations were more than offset, however, by a downturn in inventory investment, a  larger decrease in federal government spending, and a downturn in housing investment.

GDP revisions
The upward revision to real GDP growth reflected the incorporation of newly available source data. Consumer spending was revised up (mainly services), while business investment (mainly intellectual property products) and inventory investment were revised down.

Personal income and personal saving
Real disposable personal income (DPI)—personal income adjusted for inflation and taxes—increased 0.8 percent in the fourth quarter, compared with 3.0 percent in the third quarter. Personal saving as a percent of DPI was 4.3 percent in the fourth quarter, compared with 4.9 percent in the third quarter.

Fourth-quarter corporate profitsCorpProfits4q_2013
Profits grew 2.2 percent at a quarterly rate, compared with 1.9 percent in the third quarter.
Profits of nonfinancial corporations rose 1.5 percent, profits of financial corporations rose 1.3 percent, and profits from the rest of the world rose 5.5 percent.

Annual corporate profits
In 2013, corporate profits rose 4.6 percent at an annual rate, compared with 7.0 percent in 2012. Profits of nonfinancial corporations rose 5.2 percent, profits of financial corporations rose 8.2 percent, and profits from the rest of the world fell 0.7 percent.

Read the full report.

GDP Growth Accelerates in First Quarter

Real gross domestic product (GDP) increased 2.4 percent in the first quarter of 2013 after increasing 0.4 percent in the fourth quarter of 2012, according to estimates released by the Bureau of Economic Analysis. The first-quarter growth rate was revised down 0.1 percentage point from the advance estimate released in April.

GDP highlightsgdp_1
The following contributed to the acceleration in growth:
• Inventory investment turned up notably, more than accounting for the acceleration in first-quarter GDP growth. Manufacturing turned up, farming accelerated, and wholesale trade declined less than in the previous quarter.
• Consumer spending picked up, reflecting an acceleration in spending for services, mainly for household utilities.
• Federal defense spending fell less than in the previous quarter, more than offsetting a downturn in nondefense spending.
• Exports turned up; the main contributors were “foods, feeds, and beverages” and nonautomotive capital goods.

In contrast, imports turned up, reflecting in part a rebound in nonpetroleum industrial supplies and materials. Also, business investment slowed, reflecting a downturn in structures and a slowdown in equipment and software.

First-quarter revisions
The 0.1 percentage point downward revision to GDP growth for the first quarter reflected downward revisions to inventory investment and to exports. In contrast, imports were revised down, and consumer spending for nondurable goods was revised up.

Corporate profitsgdp_2
BEA released its estimate of first-quarter corporate profits. Profits fell 2.2 percent at a quarterly rate in the first quarter after rising 2.3 percent in the fourth quarter of 2012.

Profits of nonfinancial corporations fell 0.8 percent at a quarterly rate in the first quarter, while profits of financial corporations fell 0.4 percent. Profits from the rest of the world fell 7.3 percent.

For more on GDP, read the full report.

GDP Growth Accelerates in Third Quarter

Real gross domestic product (GDP) increased 3.1 percent in the third quarter of 2012 after increasing 1.3 percent in the second quarter, according to estimates released by the Bureau of Economic Analysis. The third-quarter growth rate was revised up 0.4 percentage point from the second estimate released in November.

gdp_122012_1Real GDP highlights
Inventory investment was the main driver of the third-quarter acceleration in real economic growth. Nonfarm inventory investment turned up, more than offsetting a larger decline in farm inventory investment that stemmed from the summer drought in the Midwest.

In addition, consumer spending for durable goods picked up, as motor vehicles and parts turned up. Federal national defense spending rebounded, as did state and local government spending.

In contrast to these positive contributions to real economic growth, consumer spending for services slowed, and business investment turned down, mainly reflecting a downturn in spending on equipment and software.

Revisions to GDP
The 0.4 percentage point upward revision of real GDP growth reflected upward revisions to:
• Net exports, as exports was revised up, mainly industrial supplies and materials, and imports was revised down, mainly travel services and industrial supplies and materials.
• Consumer spending, mainly health care services. (After the revisions, consumer spending picked up slightly after slowing modestly in the second estimate released in November.)
• State and local government gross investment in structures.

gdp_122012_2Corporate profits
BEA released a revised estimate of third-quarter corporate profits. Profits picked up in the third quarter, rising 2.4 percent at a quarterly rate, after rising 1.1 percent in the second quarter.

Profits of financial corporations rose 17.5 percent in the third quarter, while profits of nonfinancial corporations fell 1.3 percent. Profits from the rest of the world decreased 1.9 percent.

For more, here’s the full report.