Companies have continued to report that profits have increased in 2018. Per an article in the WSJ, the companies that comprise the S&P 500 realized profit growth of 26.3% over the prior quarter in Q1. But there is reason to be skeptical:
“…a Commerce Department measure of corporate profits … showed that profits rose by just 0.1% in the first quarter from a year ago. Take away the tax-cut benefit, and the numbers were worse: Before accounting for the benefits of the tax cut, profits were down by 6%. These numbers are the only ones that show the impact of the tax cut, which created a divergence of the pre- and post-tax numbers.”
The author concedes that this only applies to one quarter of data, but it’s a trend worth watching.