US Profits Jump, But Slower Growth Could Be Looming - Feb 17 2005

US corporate profits psted a strong finish to strong year, but there are signs of slower growth ahead.
Net income rose 27% in the 4th q. among 1600 companies tracked by Dow Jones. Including th 15% rise in the 3rd q. and the second q's 40% surge, corporate profits have enjoyed a two-ear upswing that has helped to keep the US econ expansion rolling. "This has got to be among the best profit recoveries ever"...profit margins have remained healthy as companies find less-expensive ways to meet growing demand through olabor-saving tech and take other steps...such as refinancing their debt to take advantage of low interest rates.
For the broader econ, this strong performance means companies have the resources to invest in new equipment as seen by the surge in captial equipment buying during the past year - and expand into new markets.
"Total consumer spending has risen 1. trillion over the last two years...but wages and salariees have risen only $520 billion during that time. Ron Wexler at Merrill Lynch