Business in the United States

Main article: US economy

The richest people in the United States

Main article: The richest people in the United States

2023: Major deterioration in corporate profits. Net profit margin 10.6%

Net profit (after paying income taxes) of the corporate sector in the United States decreased by 7.8% for the year in real terms as of Q1 2023, and the decrease from the maximum in Q3 2021 is already 14%.

Apart from the COVID-19 crisis, which was realized rapidly along a V-shaped trajectory, the current profit trend has only one closest analogue - the 2008-2009 crisis.

In absolute terms, profit in Q1 2023 corresponds to Q4 2017 - Q1 2018, i.e. rolled back 5 years ago. Compared to the average net profit in real terms in the period from 2010 to 2017, profit has so far grown by only 10%.

Net profit margin decreased from 12.4% in Q3 2021 to 10.6% in Q1 2023, which corresponds to the beginning of 2010 and is only slightly higher than the low in 2015 (10%).

Source: Spydell Finance

Historically, the growth of the stock market has been stable on the trajectory of net margin growth, such as from 2016 to 2019 or from 2020 to 2021. Now the margin is decreasing and will continue to decline for several reasons:

• significant increase in intermediate costs (especially cross-border supplies of imported intermediate products),
• the growth of the wage fund,
• increased tax burden.

Although American business itself is quite efficient in the context of profit generation, internal and external costs have become too high, and demand is stagnating. In 2021, against the background of growing post-covid demand, the business quite successfully threw inflation risks on consumers and customers, accelerating prices and margins, but now such a maneuver will not succeed. Demand is depleted.

Corporate taxes from operating income are about 17%, which is noticeably higher than the 12-14% that was observed during the Trump tax preferences period in 2017-2020, but incomparably lower than the 25-27% that were before the 2008 crisis and even more so 50 years ago (33-37%).

Source: Spydell Finance

Reducing the tax burden since 2007 - as one of the main resources for unreasonably high dividends and byback, which led to an increase in stocks. Now they are hitting the brakes - another strong negative for the market, Spydell Finance wrote.

See also

• Business in Russia