GDP rose 3.4 percent in the fourth quarter, above recent forecasts of 3.2 percent but below the massive 4.9 percent bump in the third quarter, according to the Commerce Department.
Adjusted profits after taxes hit a record high of $2.8 trillion, and profits increased 3.9 percent, smashing expectations of 3.3 percent.
“Today’s report … revealed that corporate profits rose substantially in the fourth quarter to a new record high,” EY economist Lydia Boussour wrote in an analysis. “Before-tax corporate profits rose by the most since the second quarter of 2022, up $133 billion following a $109 billion advance [estimate].”
“Profit margins expanded for a second consecutive quarter, up 0.3 percentage points to 12.2 percent of GDP as faster productivity kept a tight lid on unit labor costs,” she wrote.
Inflation fell to 2 percent during the fourth quarter as measured by the “core” personal consumption expenditures (PCE) price index, which excludes food and energy categories and the Federal Reserve’s preferred inflation gauge.
New monthly core PCE data, which came in at 2.8 percent year-over-year in January, comes out Friday.
Market commentators welcomed the latest GDP readings.
“This reflects the continued resilience of the U.S. economy,” Michelle Cluver, head of ETF portfolios at Global X, wrote in an analysis.
“It is encouraging that this upward revision primarily came from consumer spending and nonresidential fixed investment,” she said.
The Hill’s Tobias Burns has more here.
