It's All Uphill From Here for Corporate America
Fat profit margins are likely to buckle under the pressure to boost worker compensation.
Workers are rising up. (Photo by Keystone/Hulton Archive/Getty Images)
Photographer: Keystone/Hulton Archive/Getty Images
Wall Street seers expect the benchmark S&P 500 Index to generate earnings per share that are up 46% this year from 2020’s depressed level, with growth decelerating to 8% in 2022, according to data compiled by Bloomberg. Even that lower number for the coming year may be too rosy.
Covid-19 isn’t going away, as shown by the fast-spreading omicron variant, and renewed restrictions are possible. After enticing consumers to buy early in the holiday season, retailers will be swamped by all those shiploads of goods from Asia that are waiting to unload. An old-fashioned inventory cycle with liquidation sales and production cuts is likely early in the new year. Plus, the Federal Reserve is swiftly tapering its bond purchases in preparation for higher interest rates in a matter of months.