The American Economy in a Nutshell: Flat Revenues, Great Earnings

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The Wall Street Journal reports that American firms are struggling with falling prices due to weak consumer demand:

With about half of companies reporting year-end earnings, Thomson Reuters estimates revenue for companies in the S&P 500 stock index rose just 0.9%—capping two years of lackluster revenue growth and tying the third-weakest quarterly sales growth since the fall of 2009….The persistent weakness in revenue also prompts companies to cut back costs and plow their spare cash into share buybacks instead of investments like new factories and hiring. Fourth-quarter earnings, as a result, are expected to be up 9.4%.

There you have it. Earnings are up nearly 10 percent—because companies are cutting staff—and revenues are essentially flat—because workers have no money. This is the American economy in a nutshell. Solutions welcome.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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