It should be noted that in my previous post regarding stock market valuations, I didn't stress an important aspect of the economic events of the next few years: corporate profits are high and likely will not grow very fast. This is about as good as it gets for profitability, unless our post-depression economic structure changes for some reason.
Companies are already starting to miss overoptimistic profit targets. This will likely get even worse. Companies will try to drive sales by investing in new markets or to increase profits by investing in new equipment. The labor market should tighten, driving up labor costs, and driving down profit overall.
On the whole, this is the time in the business cycle where the employees get their due portion of the pie.
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