S&P 500 Earnings At Record High

Yippee! S&P 500 operating earnings per share rose to a record high in Q3, for the first time since Q2-2022, and its 4.6% y/y increase was the first such gain in four quarters (chart). Forward earnings rose to another record high during the December 7 week, suggesting the same for actual earnings during Q4.

The just-ended earnings recession was very mild, with three back-to-back quarters of modest single-digit percentage declines on a y/y basis. There was no revenues recession. The earnings weakness of recent quarters has been entirely attributable to the decline in the profit margin due to cost-push inflation, and productivity has been weak because of unusually high turnover in the labor market, with record-high quits and job openings earlier in the year.