Ready for some ugly numbers? Well, according to the WSJ:
Corporate profits after taxes were revised a bit lower. After-tax earnings fell 3.2% to $1.300 trillion in July through September from the second quarter, the report showed. Profits previously were estimated falling 3.0%. Second-quarter earnings decreased 0.4%. Year over year, profits fell 10.1% since the third quarter of 2007.
Digging into the data, one can easily see the struggles corporations (and the public sector reliant on taxing corporate profits) are going through. The following sums it up:
- Undistributed profits down 30+%, corporate profits and profits down ~10%
- Taxes on income down (less profit to tax)
- Cash flow down (less profits + expensive financing to replenish cash)
- Consumption of fixed capital up (use it or lose it, fixed capital doesn't disappear)