Global Macro Service > Research Briefings > United States

Plunging profit margins bad omen for economy

The corporate sector is displaying worrisome symptoms. Profits posted their first back-to-back quarterly decline in two years, and profit margins are enduring their longest late-cycle contraction in post-war history. Newly revised NIPA data suggest that the strong profits previously reported were due to aggressive financial accounting and underestimations of employee stock options exercised.

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