After-tax profits dive across US business in weak third quarter

Ben Southwood
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US MANUFACTURERS, miners and wholesale traders all saw their profitability drop off in the third quarter, though professional services firms enjoyed improved earnings.

After-tax profits across big US manufacturers dipped from $146.1bn (£88.1bn) to hit $132.5bn in the third quarter, according to data released yesterday by the US Census Bureau.

Miners saw profits sag from $16.4bn in the second quarter to $1.1bn, while wholesalers saw a $0.3bn, not statistically significant fall in their own incomes after tax. Firms working in the information industries also saw their profits decline, from $26.7bn to $25bn.

Only the professional and technical services corporations of America saw their profit figures improve in the third quarter, and even then by only a marginal amount. Firms in the sector with over $50m in assets each amassed $6.3bn after-tax profits between them, up $0.3bn on the second quarter of the year.

But employment data for November gave a much cheerier picture of the business situation in the economy. The Conference Board’s employment index edged down from 107.84 in October to 107.82 in November, but this tiny drop still left the index 3.3 per cent higher than a year ago, and in the positive, above-100 range.

Yet Gad Levanon, director of macroeconomic research at the Conference Board, said the data suggested the US labour market was still fairly weak.

And Levanon warned that a slowdown in the fourth quarter, continuing into 2013 – which is expected by many analysts – would impact on the labour market and hit US job growth.