There is a reason for real corporate profits putting pressure on...

@Globalflows
Capital Flows@Globalflows
19 views Jun 24, 2025 ~1 min read
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There is a reason for real corporate profits putting pressure on real GDP.
We live in a nominal world but when corporate profits are negative in real terms, it needs to be reflected in the tangible components of the economy such as output and employment.
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Some connected examples:
Labor market in health care sector
Medical portion of services CPI
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Notice "pressure on margins" and focus on cost management. This is key because once this type of pressure finds its full impact, employees will be laid off. This connects to the real corporate profit dynamic i mentioned above.
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This actually connects to part of the reason we see spikes in initial claims comparable to the vix as opposed to slow trends. This dynamic of negative real corporate profits and companies putting off layoffs till the last minute in order to avoid turnover costs, compresses vol.
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Part of my research process is reading about each sector and connecting it with the data. This has always proved incredibly helpful in interpreting the WHY behind things.
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