Friday, June 10, 2011

Corporate Profits: The Growth of Finance

Corporate profits after tax, from FRED (as before):

Graph #1

The blue line is total corporate profits after tax, as above. The red line is the total for "nonfinancial" corporate business, the productive subset of corporations.

Graph #2

Showing the growth of financial-sector profit as a percent of total corporate profit:

Graph #3

Finally, comparing corporate profit of the financial sector to that of the "nonfinancial" or productive sector:

Graph #4

Here, the down-sloping blue line indicates the profits of productive (or "nonfinancial") corporations as a share of total corporate profit. The red, up-sloping line indicates the share accruing to the financial sector.

Over the past 60 years, financial sector profits have grown from about 10% of total corporate profits to almost half.


Jazzbumpa said...

Good. I wanted this. Thanx.


Jazzbumpa said...

If you're willing to take an assignment, I'll suggest doing the same thing with debt. I'm pretty sure finance sector debt dwarfs the rest.


The Arthurian said...

About 30 percent of total debt. But all by itself, financial debt peaked at 120% of GDP.