Skip to content

Covid Can’t Stop Corporate Profits From Climbing to Record Highs

Tax cuts were a big help in the third quarter, along with government assistance to businesses.
relates to Covid Can’t Stop Corporate Profits From Climbing to Record Highs
Illustration: George Wylesol for Bloomberg Businessweek

U.S. corporations pulled in more profits in the three months ended in September than ever before. Not just in dollar terms—something that happens frequently—but as a share of the economy. According to initial estimates from the U.S. Bureau of Economic Analysis, third-quarter after-tax corporate profits from current production amounted to 11% of gross domestic product. The previous record of 10.7% was set in the second quarter of this year; before that the all-time high was 10.6%, in the first quarter of 2012.

How high did they get before that? In the quarterly data, which go back to 1947, after-tax profits never topped 9% of GDP before 2010. In annual data they did reach 9.1% in 1929. That ill-starred precedent has at times raised concerns that high profit shares are unsustainable, a sign of an economy tilted too far in favor of corporations and their shareholders.