Profits as a % of National Income remain elevated:
Many other commentators have likewise commented on high profit levels in expressing concerns over price earnings ratios. Importantly the cross reference of personal disposable income growth is also useful in the economic context:
When have we ever had a bull market with such weak income growth…? At least not since the 1960s..
And income fundamentals remain weak. And income fundamentals take time to build. And income fundamentals materially impact growth.
Many point to falling debt service ratios, but if we adjust out for weaker income growth we actually find that debt service ratios are on a long term upward rising trend. We could also make other adjustments that would put this one variable into its proper perspective:
High profit levels on their own are not necessarily bad, we all know that, but they are if we combine this with income and wealth inequalities and weak capital expenditure trends.