Pre-Tax Corporate Profits Rise 0.2%, After-Tax Corporate Profits Rise 6.7%


The Trump Tax cuts strongly came into play in today's GDP update which includes corporate profits.

The BEA's Second GDP Estimate for the second quarter shows a slight upward revision in GDP from 4.1% to 4.2%, seasonally-adjusted annualized.

In the second estimate, the BEA also releases its first (preliminary) take on corporate profits for the the quarter.

Econoday provides a nice graph.

Details (Table 10)

  • After-tax corporate profits rose a year-on-year 6.7 percent in the second quarter to $1.969 trillion without inventory valuation and capital consumption adjustments.
  • Pretax profits on this basis were $2.206 trillion for only a 0.2 percent yearly gain that, in comparison to the strong gain for after-tax profits, underscores the significant effect of this year's corporate tax cut.
  • When including inventory valuation and capital consumption adjustments, pre-tax corporate profits rose a year-on-year 7.7 percent to $2.250 trillion with after-tax profits at $2.013 trillion for a 16.1 percent gain.
  • Taxes on corporate income, at $237.1 billion and which are calculated on this basis, fell 33.4 percent from the second quarter of 2017.

Wages (Table 8)

Wages and salaries rose 1.1% (not adjusted for inflation), from $8.71 trillion to $8.81 trillion.

Mike "Mish" Shedlock

Comments (3)
No. 1-3

Everything is going up ... including the level of bear capitulation.


Someone explain how the stock market continues to levitate when at best, profits are only up 6.7% y/y.


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Global Economics