Today’s GDP report paints a bleak picture. GDP for the first quarter was revised down to 0.8%. The second quarter of 2016 came out at 1.2%, and will likely be revised lower.
Here is what they also released, but are not talking about:
Corporate profits before and after taxes have also been revised back to the first quarter of 2013. And it is bleak.
Remember that businesses do not go into business just to sell you goods and services. They do so to sell you goods and services to generate profits.
Would you trudge off to work every day to earn less than you did last year? And less than you did two years ago? Or would you make some changes?
We have now had 7 consecutive quarters of US corporations making less money than they did in the same quarter the previous year after taxes!
When the second quarter numbers come out, we will have made it 2 straight years of less profits. And you wonder where the real job growth is hiding?
To make it clear the impact of taxes in the US, we only had 4 consecutive quarters of profits before taxes being negative year over year.
The tax load in the US is destroying the US economy. Bit by bit and quarter by quarter.
Icing on the rotten economic cake?
There is none. Corporations are cutting spending and expansions as rapidly as they can.
What kept the GDP positive this time around? Consumer spending.
How long can consumer spending hold up if we do not have the economic growth to support the businesses that employ them?
You tell me.
The Federal Reserve Bank, along with the US Government is destroying our economic prosperity. Whether it is an accident or on purpose no longer matters.
Something must change, and soon.