Nonsequitur: US Corporate Profits to Decline

September 17, 2012

Nelson Schwartz of the New York Times reports that Wall Street expects quarterly profits at large American companies to decline for the first time since 2009.  Anemic domestic growth, the European Recession and slowing growth in China all contribute to the slowdown.

“A lot of the profit gain you had in the last few years was a bounce from the recession and a result of very aggressive cost-cutting,” said Ethan Harris, chief United States economist at Bank of America Merrill Lynch. “Those factors are going to be very hard to replicate.”

The decline is reflected in a contraction of industrial production and inhibited hiring.

 

 

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