Somebody must have leaked to Obama today’s release of manufacturing profits showing a 9.45% increase in after-tax profits, from 134 billion in the 4th quarter of 2011 to 146 billion in the 1st quarter 2012, which caused him to claim the private sector is OK. Drill down to the specific industries and you will see that the private sector is not OK.
It’s true that after-tax profits were higher than in any 1st quarter period since 2008, as shown in the blue column in the chart below.
However, not all industries are doing well. In fact there is a wide dispersion, with the following distinctions:
- Motor vehicles and parts industry’s after-tax profits declined $11 billion.
- Computer systems declined one billion.
- Publishing and broadcasting declined over 500 million.
These numbers are just for the last three months, from the 4th quarter 2011 to the 1st quarter 2012.
The good news is that some industries did very well, increasing after-tax profits by:
- $15 billion-Telecommunications.
- $5.8 billion-Pharmaceuticals.
- $5.3 billion-Mining.
- $3.3 billion-Chemicals.
- $1.4 billion-Petroleum.
Telecommunications did well mostly because in the 4th quarter of 2011 the industry recorded losses exceeding $7 billion. The bottom line from today’s release of after-tax profits for industry is that the only industry doing well today is the pharmaceutical industry.
Quarterly Financial Report (QFR)
Manufacturing, Mining, Trade, and Selected Service Industries