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The BEA first-Quarter GDP Report shows a decline in corporate profits.

Key Points

• Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) decreased $118.1 billion in the first quarter.
• On a percentage basis, profits decline 2.95 percent.
• Profits increased $204.7 billion in the the fourth quarter, up 5.38 percent

Profits swing substantially, but -2.95 percent is big move. It’s the largest decline since -8.64 percent in the fourth quarter of 2020 coming out of the Covid pandemic.

Significant Revisions to First-Quarter GDP, Income Declines 0.2 Percent

Earlier today, I noted Significant Revisions to First-Quarter GDP, Income Declines 0.2 Percent

Gross Domestic Income drops, Investment higher, real final sales lower.

Superficially, that was an increase of 0.1 percentage points (an upward revision) from the advance report of -0.3 percent.

However, the BEA revised Real Final Sales from -2.5 percent to -2.9 percent. RFS is the bottom-line estimate of GDP. The difference between the base forecast and RFS is an inventory adjustment that nets to zero over time.

The BEA does not release Gross Domestic Income in the advance report. It came in at -0.2 percent.

Key Numbers

• DGP: -0.2 percent
• GDI: -0.2 percent
• Corporate profits: -2.95 percent
• Real Final Sales: -2.90 percent.

These are very recession-looking numbers. Click on the previous link for more revision details.

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