After last week’s GDP data signaled booming profit margins, this week’s round of labor market data suggests that the profits picture will remain bright in the third quarter – but at the cost of increasing pressure on the consumer. There was no good news for employees’ incomes – as not only did the number of jobs decline, but wage growth was a meager 0.1%. We estimate that trend growth over the next two months would produce only a 2.4% annualized growth rate in nominal consume

It is that time of the quarter, when we can first estimate profits from the National Income and Product Accounts – and this one is a doozy. We believe domestic corporate profits soared at a 37% annual rate in the second quarter, and were up 20% from a year ago – reaching a staggering 12.9% of GDP, up 0.5% from the prior strong level. This does not match the estimated heights of 39% annual growth in S&P500 profits, but it also does not contain contributions from unrealized cap

It was a tough week for financial markets as the other shoe dropped in several markets. In energy markets, the Iran-allied Houthis fired on Saudi tankers in the Red Sea, forcing them to turn back, effectively closing the Bab Al Mandab, compounding the renewed closure of the Straits of Hormuz. Oil prices jumped back over $100 a barrel for Brent crude, and $90 a barrel for West Texas Intermediate. Meanwhile, Tesla and Alphabet both announced earnings, negative cash flow and cap