Have overall corporate profits ever had a sustained decline?

[jasonc]

Looking at the rapid rise in earnings over the last 8 years and rally in stocks I am beginning to question any type of economic cycle. Has there ever been a period of sustained decline in corporate profits? Through this recovery wage growth has been fairly low and margins have expanded but was there ever a time where wage growth and margin compression were growing fast enough that corporate profits either declined or largely didn't grow over a 10 year period?

Given the current focus on stocks and corporate profits I imagine we would just continue easing if this situation was ever to happen which would most likely cause inflation but result in come level of profit growth.

FYI, I am 30yo and been in financial sector for 8 years so recent market developments have probably tainted my perception of a bear market being possible.

 

[2rosy]

https://fred.stlouisfed.org/tags/series?t=corporate+profits

 

[tommcginnis]

Looking at the rapid rise in earnings over the last 8 years and rally in stocks I am beginning to question any type of economic cycle. Has there ever been a period of sustained decline in corporate profits?

If you had been 'market aware' for the last 18 years, versus the last 8 -- your perspective would not be quite so rosy. To wit:
http://www.multpl.com/s-p-500-earnings/
Adjust that for inflation[!!].....

Compare this to the market crash that produced The Great Depression -- in fact that was not one crash, but three, in succession. (Roughly, Oct.29, Oct.30, and Oct31, with only partial (and decreasing) 'recoveries' each time. That produced (GDP and market-wise) an entirely flat period for 8-9 years, until the great (and unbilled) military build-up going into WWII. Better than a decade of hell, just to get back to flat.

The Great Recession was little different. I laughed loudly when Obama was sound-bited on tv saying, "This will take longer than 6 months to get out of." YA THINK?!?!? With Bernanke (renowned Princeton 'Depression' scholar) over one shoulder, and Geitner & Lew et.al. over the other, and he comes out with "longer than 6 months"???? That was *not* good "event management."

At any rate, we got a partial tax bill. We have *some* medical-finance changes. If we can do medical care right, and if we can get over the HUGE tax that flies under the rubric of "Homeland Security" -- we'd be tapping a rich, rich vein of economic activity.*


((*Think about that the next time you're in an airport etc. line: "How fast would a salary clock be ticking, were all these people hooked to it....?" ))