A High-Water Mark for Profits

According to a new analysis from Deutsche Bank’s economics research team, corporate profits are trending toward record highs. A third quarter estimate shows that corporate profits increased to $1.68 trillion at an annualized rate, higher than their previous peak in the third quarter of 2006 at $1.66 trillion (unadjusted for inflation). Joseph A. LaVorgna, the chief United States economist at Deutsche Bank said, “Not only are we seeing a tremendous V-shaped recovery in corporate profits, but we are in fact seeing the biggest corporate profit recovery ever.” Although profits have been increasing, unemployment remains constant around 9.6%. It is encouraging to see companies perform at high margins because at some point the profits will translate to additional employment.