In This Crappy Economy, Corporate Profits Soar
There's a disconnect between profitability and jobs
By Kevin Spak, Newser User
Posted Jul 5, 2011 7:55 AM CDT
A board on the floor of the New York Stock Exchange shows the closing number for the Dow Jones Industrial average, Feb. 1, 2011.   (AP Photo/Richard Drew)

(Newser) – There's a whole lot of evidence that the US' economic recovery isn’t going well—unemployment remains too high, consumer lending too low, and consumer confidence in shambles—but one place you won’t find that evidence is on corporate balance sheets. US companies are poised to post big profits in the second quarter, the Wall Street Journal reports, exposing a disconnect between their wellbeing and that of the economy as a whole. One analysis estimates that combined Q2 earnings of companies in the S&P 500 will be up 13.6% over the same quarter of 2010.

“Corporate profits have been much stronger than the economy in general,” says one market strategist. Many companies cut costs (read: jobs) during the recession, and found that it improved their bottom lines when coupled with improvements in productivity. At the same time, demand from emerging markets has offset weak demand at home. But there are signs that can’t last forever; rising raw material prices could cut into profits during the rest of 2011, and retailers will keep feeling the pain if consumers don’t rebound.

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misterguydude
Jul 5, 2011 4:15 PM CDT
Global fiscal policy is pretty much 100% about hoarding cash flow. It's a wonder we've gotten this far with all of the political rivalry and individual corporate interest ruling the day. I hope that the big countries (or companies for that matter) realize the inevitable demise of the system if it continues on the current path, and try to pull SOMETHING together as a whole to regulate the ridiculous balance of wealth and power to the 1%. We need something to unite the globe, and apparently 'globalization' of industry isn't really getting it done. I realize we don't all have the same values and beliefs, but we all want equal treatment and none of us want each other to get totally screwed over either. At least, I hope that's not the case. :)
Twiny
Jul 5, 2011 3:07 PM CDT
Cut the taxes of corporate America and they will create jobs. The Republicans have been spouting this bullshit for a while now. Alright, so where are the fucking jobs? Record breaking profits for companies, record breaking salaries for CEO's, and still no new jobs for the workers. You Republicans are lying, cheating BASTARDS, intent on serving only your corporate masters.
tangeri
Jul 5, 2011 12:29 PM CDT
The government needs to protect the middle class. That's the only way our economy will see any lasting prosperity.