Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Oxford Unintended Consequences

Financial Markets

Research and data on interest rates, bonds, equities, credit, risk premiums, corporate profits, and investor expectations. The archive examines what market prices reveal about growth, inflation, policy, and financial conditions.

AI Summary. A study of US private firms finds that a one-standard-deviation rise in a firm's financing shortfall is associated with a 45% higher likelihood of going public. After an initial public offering, disagreement among lenders about a firm's default risk falls, borrowing costs drop by 45 basis points, and debt rises more than 50% relative to comparable firms by year three.

Andres Almazan, Nathan Swem, Sheridan Titman and Gregory Weitzner National Bureau of Economic Research
Date Posted:

A study of 100k+ private nonfinancial firms (2012–23), including 433 IPOs, suggests listing improves access to debt as well as equity. After listing, lenders’ risk assessments converge and bank borrowing costs fall 45 basis points, controlling for assessed risk.

Do financing shortfalls drive private firms to go public?

Core argument: A one-standard-deviation increase in a US private firm’s financing deficit is associated with a 45% higher likelihood of going public, controlling for size, growth, leverage, investment, and industry–location–time effects.

A one-standard-deviation increase in a firm’s financing deficit is associated with a 45% higher likelihood of going public [controlling for size, growth, leverage, investment, and industry–location–time effects]. Consistent with a reduction in asymmetric information, we find that dispersion in PD [probability of default as perceived by disparate market participations] drops,beginning immediately after the IPO. [Note that] we calculate PD dispersion only for banks present prior to the IPO]. We find that after controlling for these risk assessments, firms’ borrowing costs drop by 45 bps after going public. [controlling for bank–firm and bank–quarter fixed effects]. Figure 7 shows that in the first year, there is a statistically significant drop in leverage of about 4 pp.. However, the point estimate returns to zero by year three. Figure 6 shows that IPO firms increase their debt by more than 50% relative to control firms by year three following the IPO. [An important caveat is that our post-IPO estimates capture both treatment and selection effects].

Takeaways by Macro Roundup® AI

  1. A one-standard-deviation increase in a US private firm’s financing deficit is associated with a 45% higher likelihood of going public, controlling for size, growth, leverage, investment, and industry–location–time effects.
  2. Dispersion in the probability of default perceived by banks present before the IPO drops immediately after it, and after controlling for these risk assessments, firms’ borrowing costs fall 45 basis points following the IPO, with bank–firm and bank–quarter fixed effects.
  3. IPO firms’ leverage falls a statistically significant 4 percentage points in the first year, with the point estimate returning to zero by year three, while their debt rises more than 50% relative to control firms by year three; these post-IPO estimates capture both treatment and selection effects.

Related Articles:

  • A Catalyst For The AI Bubble Break — Historically, controlling for valuations, a 1% rise in the share of the market represented by initial public offerings has been associated with roughly a 4% decline in prices. With large artificial-intelligence company listings expected and share issuance exceeding buybacks, equity supply could shift from shrinking about 1% a year to growing near 5%, implying returns roughly 20% below average.
  • The Coming Mega-IPO Flow & Funding Problem of 2026 — Adjusted for inflation, SpaceX alone would rank as the second-largest initial public offering ever, behind Saudi Aramco, and three such listings together would exceed the entire 1995–2000 dot-com wave. Funding that equity supply requires selling existing holdings, and index rule changes make passive funds forced buyers, pressuring large-cap technology stocks.
  • The Deep End: 2025 Alternative Investments Review — In venture capital, only consistently investing with top-quartile managers outperformed the S&P 500, while the median manager at best matched public equity markets and fourth-quartile managers destroyed value relative to equities. Fees are part of the issue: an 11.7% annualized NASDAQ 100 return falls to 7.4% under a 2%/20% fee structure.

AI Summary. China's export growth accelerated after its currency depreciated, which the author argues is evidence that exchange rate moves, not just domestic demand, drive its trade surplus. Because Chinese domestic demand growth no longer pulls in imports, the author contends there is no realistic path to balanced trade without a stronger renminbi.

Brad Setser Council on Foreign Relations
Date Posted:

China’s export growth accelerated following the RMB’s depreciation in 2022, underscoring the role of exchange rates as a factor in external adjustment. Since rising domestic demand no longer lifts imports, Setser argues, reducing China’s trade surplus will require a stronger RMB.

Does balancing China's trade require a stronger currency?

Core argument: China requires a 1.5 percentage point contribution from net exports to growth each year, putting it on a collision course with trading partners absent a currency correction that supports more balanced trade even without trade restrictions.

The best evidence that exports responded to changes in the currency, and not simply to changes in the path of China’s internal demand, is the acceleration in China’s export growth after the RMB’s depreciation over the course of 2022. Those who believe the path of internal demand is critical to rebalancing and that exchange rate moves are secondary need to explain how an acceleration in domestic demand would, on its own, lead China’s external accounts to adjust. One important, stylized fact about China is that domestic demand growth is no longer feeding over to import growth (ex-gold, that is). Bottom line: China, which needs a 1.5 percentage point contribution from net exports every year, is on a collision course with its trading partners without a currency correction that provides the basis for more balanced trade even in the absence of trade restrictions. And there isn’t a realistic path towards balance that doesn’t involve a stronger RMB; there aren’t, as Paul Krugman once put it, immaculate transfers.

Takeaways by Macro Roundup® AI

  1. China requires a 1.5 percentage point contribution from net exports to growth each year, putting it on a collision course with trading partners absent a currency correction that supports more balanced trade even without trade restrictions.
  2. The acceleration in China’s export growth following the renminbi’s depreciation over 2022 is the best evidence that exports responded to the currency rather than to the path of China’s internal demand.
  3. Domestic demand growth in China no longer feeds through to import growth, excluding gold, and no realistic path toward external balance avoids a stronger renminbi.

Related Articles:

  • The Year of the Trojan Fire Horse: China’s Imbalanced Economy and Unrelenting Mercantilism — About 30% of Chinese industrial companies are unprofitable "zombies" kept alive by subsidies far larger than those elsewhere, rather than exiting amid falling industrial producer prices. Countries with large increases in manufactured imports from China also saw slowdowns in domestic manufacturing, including declining manufacturing shares of output across most of Southeast Asia.
  • Why the World Needs to Force China’s Yuan to Revalue — Goods prices have fallen in China since the pandemic while rising in developed markets, driving the inflation-adjusted yuan exchange rate sharply lower and increasing China's competitiveness. Goldman Sachs economists estimate China's price discount versus foreign peers at 32% in electric vehicles, 38% in refrigerators and 53% in shoes.
  • The World Should Not Ignore China’s Undervalued Currency — China's reported current account surplus of about 4% of GDP is roughly 3 percentage points above the International Monetary Fund's estimated norm, implying a currency undervaluation of about 20%. Adjusting for surging gold imports and a misreported investment income deficit would lift the surplus to about 6% of GDP and the estimated undervaluation to 30–35%.

AI Summary. Foreign investors made roughly $1.5tn in net purchases of US equities from the start of 2024 through July, with chipmaking economies like South Korea and Taiwan helping fund American tech firms' AI buildout. Bloomberg Economics estimates about 20% of foreign US equity holdings were AI-related in 2025, versus roughly 10% in 2019.

Shawn Donnan, Estelle Ou and Jorgelina Do Rosario Bloomberg
Date Posted:

The profits of South Korean and Taiwanese firms are flowing into AI-related US equities. A Bloomberg analysis found ~20% of all foreign holdings of US equities were in AI-related sectors, up from ~10% in 2019.

Are foreign investors funding America's AI buildout?

Core argument: Foreign investors held roughly $4.9 trillion of US-listed shares in AI-centered industries at the end of June, a sum roughly equivalent to Germany’s annual GDP, according to Bloomberg Economics’ analysis of Treasury data.

The AI boom is creating massive demand for high-end chips and new pools of savings in places that make them like South Korea and Taiwan which are flowing to fund American tech companies and their $9 trillion AI build out. Foreign investors made roughly $1.5 trillion in net purchases of US equities alone since the beginning of 2024 through the end of July. A Bloomberg Economics analysis of Treasury data shows that in 2025 roughly 20% of all foreign holdings of US equities were in AI-related sectors, up from roughly 10% in 2019. That number has grown with soaring valuations since then. But even assuming that 20% level, foreign investors had about $4.9 trillion of exposure to US-listed shares of companies in industries at the center of the AI boom at the end of June. That’s roughly equivalent to Germany’s annual GDP.

Takeaways by Macro Roundup® AI

  1. Foreign investors held roughly $4.9 trillion of US-listed shares in AI-centered industries at the end of June, a sum roughly equivalent to Germany’s annual GDP, according to Bloomberg Economics’ analysis of Treasury data.
  2. AI-related sectors accounted for roughly 20% of all foreign holdings of US equities in 2025, up from roughly 10% in 2019, per Bloomberg Economics’ analysis of Treasury data.
  3. Foreign investors made roughly $1.5 trillion in net purchases of US equities from the start of 2024 through the end of July, with savings from chipmaking economies such as South Korea and Taiwan flowing to American tech companies and their $9 trillion AI build-out.

Related Articles:

  • Califoreboding — A basket of 42 AI stocks accounts for 60%-80% of all S&P 500 earnings growth, price returns and capital spending, while 60% of S&P 500 stocks sit 20% or more below their highs and only 30% outperform the index. AI-related construction spending has risen 38%, the only positive trend as manufacturing, commercial real estate and residential construction decline.
  • Financing the AI Buildout — The authors estimate roughly 57 gigawatts of operating US data center capacity against a planned development pipeline of about 509 gigawatts, which is not a completion forecast since projects may be delayed, scaled back, or abandoned. Their central scenario has 182.8 gigawatts of added capacity becoming operational through 2032, 117.2 gigawatts completed later, and 226.9 gigawatts never completed.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.

AI Summary. An artificial intelligence investment boom that is insensitive to interest rates is drawing capital, electricity and labor away from rate-sensitive sectors such as housing and autos, which the author argues will force the Federal Reserve to hold rates higher for longer. The durable fix is expanding power, chip and infrastructure supply.

Torsten Sløk Apollo
Date Posted:

Sløk warns the rate-insensitive AI buildout has triggered unbalanced growth in the US economy by crowding out capital, electricity, and labor from vulnerable sectors like housing and autos.

Does a rate-insensitive AI boom force the Fed to keep rates higher?

Core argument: The AI boom’s insensitivity to interest rates is draining capital, power and labor from rate-sensitive sectors such as housing and autos, producing a “Dutch disease” dynamic in the US economy.

AI's rate-insensitive boom is draining capital, power and labor from vulnerable sectors like housing and autos. Trapped between inflation driven by the AI boom and weakness in rate-sensitive industries, the Fed will have to keep interest rates higher for longer. Because monetary policy cannot resolve this sectoral imbalance, the only durable fix is expanding the supply of power, chips and infrastructure.

Takeaways by Macro Roundup® AI

  1. The AI boom’s insensitivity to interest rates is draining capital, power and labor from rate-sensitive sectors such as housing and autos, producing a “Dutch disease” dynamic in the US economy.
  2. Caught between AI-driven inflation and weakness in rate-sensitive industries, the Federal Reserve will have to hold interest rates higher for longer.
  3. Monetary policy cannot resolve the imbalance between AI and rate-sensitive sectors, leaving expansion of the supply of power, chips and infrastructure as the only durable fix.

Related Articles:

  • Financing the AI Buildout — The authors estimate roughly 57 gigawatts of operating US data center capacity against a planned development pipeline of about 509 gigawatts, which is not a completion forecast since projects may be delayed, scaled back, or abandoned. Their central scenario has 182.8 gigawatts of added capacity becoming operational through 2032, 117.2 gigawatts completed later, and 226.9 gigawatts never completed.
  • AI Set to be Largest CapEx Cycle Ever … and Soon Majority Externally Financed — Hyperscaler and data-center investment is tracking toward $1.5tn annually by 2030, which in real terms would exceed the 2005-06 housing boom, the 1990s fiber peak, and the 1882 railroad peak combined. External debt and equity are projected to fund close to 90% of the buildout, making it dependent on credit markets.
  • The Macro Implications of the AI Capex Boom — Artificial intelligence capital spending is estimated to add roughly 1.4 percentage points to US growth in one year and about 1.5 points the next, comparable to business investment's contribution during the tech bubble. A material part of that estimate reflects profits at Nvidia and a few other chipmakers that are unlikely to be recycled back into the economy.

AI Summary. The Congressional Budget Office projects that if interest rates run 1.5 percentage points above its economic forecast, deficits would be $6tn larger over 2026–2036, reflecting a $4.9tn rise in net interest costs and $1.1tn in added debt-service costs. Debt held by the public would reach 133.1% of GDP in 2036, 12.9 percentage points above its baseline.

CBO Staff Congressional Budget OffIce
Date Posted:

If interest rates rise 150bp above CBO’s current extended baseline over 2026–2036 (which would leave the 10-year Treasury with a mean yield of 5.8% over that period), deficits would be $6T larger over the period.

How much would higher interest rates add to deficits and debt?

Core argument: CBO projects that interest rates 150 basis points above its economic forecast would make deficits a total of $6 trillion larger over the 2026–2036 period than in its baseline projections.

[If] interest rates are 150 basis points higher than those in CBO’s economic forecast—deficits are a total of $6 trillion larger over the 2026–2036 period than they are in the agency’s baseline projections. That increase in deficits is attributable to a $4.9 trillion increase in net interest costs resulting from higher interest rates on the amount of debt in CBO’s baseline projections and a $1.1 trillion increase in debt-service costs. In 2036, debt held by the public reaches 133.1% of GDP—12.9 percentage points more than debt that year in CBO’s baseline projections.

Takeaways by Macro Roundup® AI

  1. CBO projects that interest rates 150 basis points above its economic forecast would make deficits a total of $6 trillion larger over the 2026–2036 period than in its baseline projections.
  2. The $6 trillion deficit increase comprises a $4.9 trillion rise in net interest costs on the debt in CBO’s baseline projections plus a $1.1 trillion increase in debt-service costs.
  3. Under the higher-interest-rate scenario, CBO projects debt held by the public reaches 133.1% of GDP in 2036, 12.9 percentage points above its baseline projection for that year.

Related Articles:

  • The Budget and Economic Outlook: 2026 to 2036 — The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.
  • How Might Fiscal Policy Respond to the Rise of Artificial Intelligence? — The Congressional Budget Office estimates that a permanent 0.5 percentage point increase in annual productivity growth would lower publicly held federal debt after 30 years by 39% of GDP, offsetting roughly half the projected rise from 101% of GDP to 175%. Higher revenue and slower spending growth outweigh higher interest costs.
  • Soaring Bond Yields, Gaping Deficits and Towering Debts: What Could Go Wrong? — An analysis of 22 rich countries estimates that if each refinanced its entire debt at current five-year bond yields, Britain would need the largest primary surplus to stabilize its debt-to-GDP ratio, about 1.5%, followed by Italy at 1.4%, France at 1.2% and America at 1%.

AI Summary. A basket of 42 AI stocks accounts for 60%-80% of all S&P 500 earnings growth, price returns and capital spending, while 60% of S&P 500 stocks sit 20% or more below their highs and only 30% outperform the index. AI-related construction spending has risen 38%, the only positive trend as manufacturing, commercial real estate and residential construction decline.

Michael Cembalest J.P. Morgan
Date Posted:

Since January 2024, JPM’s 42 AI-related stocks drove 67% of S&P 500 returns, 58% of earnings growth, and 81% of capital spending. Cembalest notes, “the technology share of GDP growth has risen from almost zero in 2022 to ~33%,” and only 20% of states are outpacing national GDP growth, the lowest level since 1979.

How concentrated are US market and economic gains in AI?

Core argument: A basket of 42 AI stocks accounts for 60%–80% of all S&P earnings growth, price returns and capital spending since January 2024, with AI primarily benefitting AI supply chain companies rather than the companies adopting it.

A basket of 42 AI stocks accounts for 60%-80% of all S&P earnings growth, price returns and capital spending since Jan 2024. At the same time, 60% of S&P 500 stocks are down 20% or more from their all-time highs despite the market being close to all-time highs. Only 30% of stocks are outperforming the S&P 500, one of the lowest figures since 1991. AI is primarily benefitting AI supply chain companies rather than the companies adopting it. The technology share of GDP growth has risen from almost zero to 2022 to ~33%. Only 20% of US states are growing faster than the national average, almost the lowest figure since 1979. AI accounts for the only positive trend in US construction spending, having risen by 38% since January 2024. Unfortunately the other three main categories are down since then (manufacturing -28%, commercial real estate -13% and residential -6%). That’s why the decline in planned data center projects is something to watch.

Takeaways by Macro Roundup® AI

  1. A basket of 42 AI stocks accounts for 60%–80% of all S&P earnings growth, price returns and capital spending since January 2024, with AI primarily benefitting AI supply chain companies rather than the companies adopting it.
  2. 60% of S&P 500 stocks are down 20% or more from their all-time highs even as the index sits near record levels, and only 30% of stocks are outperforming the S&P 500, one of the lowest figures since 1991.
  3. AI accounts for the only positive trend in US construction spending, rising 38% since January 2024, while manufacturing is down 28%, commercial real estate 13% and residential 6%.

Related Articles:

  • Financing the AI Buildout — The authors estimate roughly 57 gigawatts of operating US data center capacity against a planned development pipeline of about 509 gigawatts, which is not a completion forecast since projects may be delayed, scaled back, or abandoned. Their central scenario has 182.8 gigawatts of added capacity becoming operational through 2032, 117.2 gigawatts completed later, and 226.9 gigawatts never completed.
  • How Much Revenue Does The AI Buildout Need In 2030? — The authors estimate AI capital spending of $560bn in 2026 and, in a high-investment case, $3.5tn of net AI capital in service by 2030, requiring roughly $1.3tn in annual infrastructure revenue once depreciation, operating costs and a 15% return are covered. That implies 7.4x growth from current annualized revenues, with downstream revenues of $1.9–2.6tn.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.

AI Summary. France's official retirement age for full benefits was 62 in 2023, versus 67 in Denmark and the US, and its average actual retirement age was the lowest in Western Europe while life expectancy at 65 reaches about 87, two years longer than in the US.

Paul Krugman Krugman Wonks Out
Date Posted:

The sharp rise in the price of credit default swaps on French government debt implies a 1.2% of default over the next 5 years, which Krugman thinks “is too low” and cautions “France may have crossed the line from too big to fail to too big to save.”

Does France retire earlier than other wealthy countries despite longer lifespans?

Core argument: France’s official retirement age for full benefits was 62 in 2023, compared with 67 in both Denmark and the United States, and its average actual retirement age was the lowest in Western Europe.

France does stand out, even among fiscally troubled nations, in one main way: its persistent inability to get realistic about retirement. The official French retirement age — the age at which workers can collect full benefits — was only 62 in 2023. By comparison, the retirement age in Denmark was 67 (which is also the age in the U.S.). The average actual age of retirement, which is always lower than the statutory age because some people choose to accept reduced benefits, was lower in France than anywhere else in Western Europe. You don’t have to be a conservative to see France’s early retirement as unsustainable, especially given that French life expectancy at age 65 is about 87 years of age, 2 years longer than in the US. France’s reliance on the euro means that it’s all too easy to see how this loss of confidence could turn into an ugly crisis.

Takeaways by Macro Roundup® AI

  1. France’s official retirement age for full benefits was 62 in 2023, compared with 67 in both Denmark and the United States, and its average actual retirement age was the lowest in Western Europe.
  2. French life expectancy at age 65 is about 87, two years longer than in the United States, a gap that strengthens the case that France’s early retirement is unsustainable.
  3. France’s reliance on the euro makes it easy to see how a loss of confidence could turn into an ugly crisis.

Related Articles:

  • France’s Marine Le Pen Pledges To Rein In Public Spending — France's National Rally party, historically a champion of big-state spending, has pledged to clean up the country's degraded public finances alongside tax cuts it describes as a fully financed "competitiveness shock." The party also proposed lowering the retirement age from 62 to 60 for those who start working young, estimating €15bn–€20bn in pension savings from correcting "unjust or inefficient" measures.
  • France is the Biggest Loser in the Global Rates Reset — French government borrowing costs now exceed the country's nominal income growth by about 2 percentage points, the most unfavorable gap between borrowing costs and growth in the rich world. By contrast, Spanish and Greek bond yields remain about 2 percentage points below their income growth rates.
  • Le Boomer Spread — The gap between French and German 10-year government bond yields exceeded 140 basis points, up from 40–50 basis points, which the author attributes to political choices favoring pensioners over bondholders, including a suspended pension reform leaving the minimum retirement age near 62. French over-65s hold higher average incomes than working-age people.

AI Summary. Corporate profit margins, long regarded as one of the economy's most reliably mean-reverting series, have risen continuously so far this century. Measured through the national income accounts used in calculating GDP, profits now take a larger share of the economy than on the eve of the 1929 crash.

John Authers Bloomberg
Date Posted:
Is Database:
Database

Since 2000, post-tax corporate profits as a share of GDP have trended upward across cyclical setbacks and are now near an all time high, above their 1929 level.

Have corporate profit margins stopped reverting to the mean?

Core argument: Corporate profits measured in the National Income and Product Accounts take a larger share of the U.S. economy than on the eve of the 1929 Great Crash.

Throughout the 20th century, profit margins were regarded as one of the purest mean-reverting series in the economy. So far this century, however, margins have done nothing but rise. Measured with the National Income and Product Accounts, part of the GDP calculation, profits are currently taking a bigger share of the economy even than on the eve of the Great Crash in 1929. The series comes with a lag, so we can assume the profit share on this basis is comfortably at a record by now.

Takeaways by Macro Roundup® AI

  1. Corporate profits measured in the National Income and Product Accounts take a larger share of the U.S. economy than on the eve of the 1929 Great Crash.
  2. Profit margins were regarded throughout the 20th century as one of the purest mean-reverting series in the economy, yet so far this century they have done nothing but rise.
  3. The National Income and Product Accounts profits series comes with a lag, so the profit share on this basis can be assumed to be comfortably at a record.

Related Articles:

  • US Focus: The Effect Of Soaring Profits — US nominal pre-tax corporate profits in the national accounts grew 23% over the past year, a pace not seen outside post-recession spikes since the mid-2000s. Wider margins were the key driver, as domestic profit growth far exceeded the 8% rise in corporate value added, pushing margins near all-time highs while the labor share hit new lows.
  • The Post‑COVID Decline in the Labor Share — The share of US national income paid to workers fell 1.6 percentage points below its pre-pandemic level, reaching a post-war low. The authors find this decline stems mainly from changes within industries rather than shifts in activity across sectors, following cyclical patterns seen in earlier recessions.
  • Are US Corporate Profit Margins Too High? — US after-tax non-financial corporate profit margins remain elevated by historical standards, estimated at 7.6% versus a post-1949 high of 8.2%, while employee pay as a share of non-financial corporate gross value added has fallen from 66% to 56%. One argument holds that subdued demographic growth leads companies to prioritize maximizing margins over expanding capacity.