How Rising Profits Could hinder the Economy From Faltering

Profits have been making a comeback. That makes a comedown for the U.S. economy seem less likely.

The Commerce Department on Wednesday reported that before-tax corporate profits rose 1.1% from a year earlier in the third quarter. This compares with a refuse of 6% in the second quarter. Moreover, that profit figure includes the income of Federal Reserve banks, which have lately been losing money owing to the combination of their big holdings of Treasury and mortgage securities and the sharp enhance in rates. Exclude the Fed, and corporate profits rose by 6.7% in the third quarter compared with a gain of 1.6% in the second.

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