More interestingly, the Fed measure shows that the rate of profit for non-financial companies has fallen since 2012 and particularly since 2014.
So, as I said at the start of this post, the main conclusions from last year remain. What the 2015 measures add is that the US rate of profit (on any measure) fell in 2015 and is now down about 3% from 2012. US corporate profits are falling in absolute terms and have been since early 2015.
The US rate of profit is likely to have fallen again this year and that fall is accelerating according to the more high frequency Fed data.
The US Department of Commerce’s Bureau of Economic Analysis (BEA) has just updated its estimates of net fixed capital stock in the US economy. This gives us the opportunity to measure the US rate of profit a la Marx up to 2015.
I made such measurements up to 2014 in a previous post about a year ago. Last December, I summed up the conclusions from the data. “First, the secular decline in the US rate of profit since 1945 is confirmed and indeed, on most measures, profitability is close to post-war lows. Second, the main cause of the secular fall is clearly a rise in the organic composition of capital, so Marx’s explanation of the law of the tendency of the rate of profit to fall is also confirmed. Third, profitability on most measures peaked in the late 1990s after the ‘neoliberal’ recovery. Since then, the US…
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