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Weekly Economic Report 1.25.25

We have long argued that in a capitalist economy the key lead indicator is profits. By that measure, the US economy has been doing very well since recovering from the Great Financial Crisis. Notably, it is not just the Magnificent 7 who have enjoyed strong profit margins – but the entire US business community, as the invisible hand has spread success across the economy. Margins for both corporate and noncorporate businesses are near record highs – unlike after the 1997 Asia Crisis, where international corporations suffered far more. Back then, corporate spending to survive Y2K was also higher, driving corporate savings into negative territory for the first time in the era of National Income and Product Account (NIPA) data, which started in 1948. Like US profits, the dollar also bottomed in the GFC -- and has risen roughly 50% over the past fifteen years, benefitting all who hold assets valued in US currency.



















































































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