Catenaa, Thursday, March 27. 2025- US corporate profits recovered in the fourth quarter after recording an increase of $204.7 billion, official data showed on Thursday, but uncertainty continues in the economy with Trump tariffs.
The Commerce Department’s Bureau of Economic Analysis (BEA)said corporate profits with inventory valuation and capital consumption adjustments increased $204.7 billion last quarter to $4 trillion after declining by $15.0 billion in the July-September quarter.
President Donald Trump has announced a blizzard of tariff actions since taking office in January. Economists have warned that the manner in which the tariffs are being handled is not supportive of economic activity.
Fears of higher prices from import duties led to preemptive buying of goods in the fourth quarter, helping to boost consumer spending and keeping the economic expansion on track.
Gross domestic product increased at an upwardly revised 2.4% annualized rate last quarter, the BEA said in its third estimate of fourth-quarter GDP.
Growth was previously estimated to be a 2.3% pace. The economy grew at a 3.1% rate in the third quarter.
The strength in profits helped an alternative measure of economic growth. Gross domestic income (GDI) grew at a 4.5% rate last quarter after rising at a 1.4% pace in the July-September quarter.
The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 3.5% rate. Gross domestic output grew at a 2.2% pace in the third quarter.
Growth estimates for the January-March quarter are mostly below a 1.5% rate and the odds of a contraction are high. The Fed last week left interest rates unchanged, an acknowledgement of the uncertainty swirling around the economy.
