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Strong corporate profits amid weak economy - What's up with that?
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03/28/11 09:32
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Strong corporate profits amid weak economy - What's up with that?
WASHINGTON — U.S. corporations continue to post strong profits quarter after quarter, even as the unemployment rate remains high and the U.S. economic recovery plods along in fits and starts. What gives?
Corporate profits grew 36.8 percent in 2010, the biggest gain since 1950, according to Friday's latest report from the Bureau of Economic Analysis. No sign could be more clear that U.S. companies see the so-called Great Recession in the rearview mirror.
The strong profits, however, mask the continued difficult terrain for businesses. Yes, profits are high, but that doesn't mean business is strong.
"It's not that they're fake, it's that they're generated through a bunch of economic anomalies that are not the normal course or normal factors that generate profits," said Martin Regalia, chief economist for the U.S. Chamber of Commerce, America's premier business lobby.