Corporate profits reach new heights

In the fourth quarter, GDP increased by 3.4 percent, beating expectations of 3.2 percent but falling short of the substantial 4.9 percent growth in the third quarter, as reported by the Commerce Department. Adjusted profits after taxes reached a record high of $2.8 trillion, seeing a 3.9 percent increase, exceeding the anticipated 3.3 percent rise.

Before-tax corporate profits saw the most significant increase since the second quarter of 2022, rising by $133 billion. Profit margins expanded for the second quarter in a row, climbing by 0.3 percentage points to 12.2 percent of GDP due to increased productivity balancing out unit labor costs.

Inflation dropped to 2 percent in the fourth quarter based on the “core” PCE price index, which excludes food and energy prices – the preferred inflation measure by the Federal Reserve. New monthly core PCE data, indicating a 2.8 percent year-over-year increase in January, is set to be released on Friday.

Market analysts were pleased with the latest GDP figures, with Michelle Cluver, head of ETF portfolios at Global X, highlighting the U

By Sophia Gonzalez

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