A key measure of corporate profits rose this spring for a second straight quarter alongside modest growth in the overall economy, though U.S. businesses remain under pressure from global weakness and other forces.
Corporate profits after tax, without inventory valuation and capital consumption adjustments, rose 4.9% from the prior quarter to a seasonally adjusted annual level of $1.627 trillion in the second quarter, the Commerce Department said Friday.
Profits had jumped 8.9% in the first three months of 2016, after dropping in three of the previous four quarters. Still, the trend remains weak and second-quarter profits were down 2.2% compared with a year earlier. An alternative measure, pretax profits with inventory valuation and capital consumption adjustments, declined 1.2% in the second quarter from the prior three months.
WASHINGTON—The U.S. economy expanded more than previously thought in the first three months of the year, but underlying trends suggest it remains vulnerable in the face of global economic turmoil.
Gross domestic product, the broadest measure of goods and services produced across the U.S., grew at a seasonally adjusted annual rate of 1.1% in the first quarter, the weakest pace in a year, the Commerce Department said Tuesday. The agency previously estimatedthe economy grew at a 0.8% pace.
The main factors behind the upward revision: The U.S. exported more goods and services than previously thought. And companies spent more than initially estimated on software and research and development.
The broader economy seems on track to rebound after a weak performance over the past few quarters. Gross domestic product, a broad measure of goods and services produced across the U.S. economy, expanded at a 0.8% seasonally adjusted annual rate in the first three months of 2016, the Commerce Department said in updated figures out Friday. That was up from an initial estimate of 0.5% growth but still represented a deceleration from the fourth quarter’s 1.4% growth rate.