Sales and Profits
Slowdown in retail sales growth.
 |
Year-over-year change in retail sales (excluding food services).
|
Corporate Profits
Debt and corporate profits.  |
Corporate profits divided by nonfinancial corporate business debt (blue) and the year-over-year change in corporate debt (red).
|
 |
Corporate profits divided by GDP (blue), market value of corporate businesses divided by GDP/10 (red), and corporate profits divided by corporate profits plus personal income (green).
|
The no longer existent gap between GPDI (gross private investment) and corporate profits as percent of GDP (though it seems to have grown).
 |
GPDI (gross private domestic investment) divided by GDP (blue), corporate profits divided by GDP (red), the difference between GPDI and corporate profits as a percent GDP (green).
|
Market value and the S&P 500 related by private investment and the CPI respectively.
 |
Market value of corporate businesses divided by private investment (blue) and the S&P 500 divided by the CPI (red).
|
The breakdown of private investment.
 |
Nonresidential investment (blue) and residential investment (red).
|
I found the GPDI and corporate profit spread the most interesting; the spread at least is growing. The change in corporate profits to debt ratio from the mid-1960s to the late 1970s is also of interest. I would suppose inflation played some sort of role, both monetary and oil based.
Graph 1 suggests we should be looking for another gray bar...
ReplyDeleteGraph 2 blue line HUGE drop, more the result of debt increase than profit change:
http://research.stlouisfed.org/fred2/graph/?g=e7O
Graph 4 green line (difference line) shows stability of the red & blue lines to about 1965. Thereafter uphill with inflation maybe (but why??) and after 1980 it looks confused to me. Interesting graph...
Art,
DeleteI think the slowdown in retail sales growth corresponds to some sort of leveling effect in the US economic recovery. I have also been looking at both corporate debt and GPDI pretty heavily to see any correlation; I think there is a faint correlation in the year-over-year change but I am trying to think of what exactly it means.
Interesting that you mention 1965. Looking at the unemployment rate, one thing I hadn't noticed until now was the small blip (uptick) in the unemployment rate in 1966. According to a couple sources of mine (Spero and Hart and Minsky, 1966 was marked by a speculative attack against the Federal Reserve - significant gold withdraws. Supposedly most of this was due to a breakdown in the Bretton Woods agreement. This all happened 5 years after the 1960-1961 recession which my sources say was also partially the fault of significant gold withdraws at the Federal Reserve.
Never heard of these gold withdrawals. But I guess they would explain why Nixon took us off gold.
ReplyDeleteThere was a "near recession" in 1966 or '67. I've found very few references to it, but lots of graphs show a recession-like wiggle at that point.