US economy: earnings alert

Article Abstract:

There is concern over US corporate profits since they could indicate a weak economy and pressure on profit margins. A weak economy means that interest rates are likely to be lower which is good for share prices as well as likely to boost economic growth. Pressure on profit margins from higher labor costs will mean a rise in interest rates which will dampen economic growth and depress share prices. Labor has seen wage rises that have been lower than productivity rise and this may change.

Inflation (Finance), Interest rates, Inflation (Economics)

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Wall Street prepares for a profits squeeze

Article Abstract:

US earnings growth could be affected by concern over interest rates and inflation since profit margins could be hit by wage inflation. Productivity growth is not rising as fast as wages and rising costs are likely to man prices will rise or profits will be eroded. Costs are dropping for some manufacturing companies. Share prices are likely to be affected if profit margins are under pressure, unless companies can achieve more efficiency savings.

Economic aspects, Profit, Profits

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