The work force may still be struggling, but corporate profits appear to be heading toward a record (nominal) high, according to a new analysis from Deutsche Bank's economics research team.
Based on what can be inferred from corporate tax receipts to date, Deutsche Bank’s economists estimate that in the third quarter of 2010, corporate profits rose to $1.68 trillion at an annualized rate, higher than their previous peak in the third quarter of 2006 at $1.66 trillion.
Note: This indicator, as released by the Bureau of Labor Statistics, is not adjusted for inflation. Depending on how you adjust for inflation — and there is no agreed-upon way to adjust corporate profits for price changes, since profits are derived from all over the world — corporate profits in the third quarter of 2006 would most likely be higher than those last quarter.
On the other hand, we also haven't experienced that much inflation in the past few years, so while the amount adjusted for inflation may be lower than 2006, it is probably not that much different. It is encouraging to hear that profits are getting back to pre-recession levels.
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