Profits have made a comeback. This makes a downturn in the US economy seem less likely.
The Commerce Department reported Wednesday that corporate pretax profits rose 1.1% in the third quarter from a year earlier. This compares to a decline of 6% in the second quarter. In addition, this profit figure also includes the income of the Federal Reserve banks, which have been losing money recently due to the combination of their large holdings of Treasury and mortgage securities and the sharp rise in interest rates. Excluding the Fed, corporate profits rose 6.7% in the third quarter, compared with a 1.6% gain in the second.
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