| WASHINGTON, July 27
WASHINGTON, July 27 Corporate America isn't
doing quite as well as the government thought, a report by the
Commerce Department showed on Friday.
The report, part of a regular annual revision to data on
economic growth and national income, showed the government
over-estimated pre-tax corporate profits by $233 billion between
2009 and 2011. Estimates on after-tax profits during the same
period were revised lower by $155.2 billion.
The government said it changed its estimates for profits
using information from the Internal Revenue Service, as well as
data from the census and from public financial reports.
Profits still are still historically high, though in the
first quarter of 2012 they backed down from the record high
posted in the last three months of 2011.
In June, President Barack Obama called attention to record
high profits when, in a gaffe, he said America's private sector
was doing fine.
Obama later clarified the economy was not actually doing
well, and Friday's data showed corporate profits aren't rising
at quite the gang-buster pace previous data had shown.
The revisions, which covered 2009-2011, showed pre-tax
profits rose 27 percent in 2010, rather than 32 percent, meaning
that year's increase is no longer the biggest on record. Profits
rose more in 2004, while the record increase was in 1955.
Last year, profits rose 7.3 percent, rather than the 7.9
percent increase initially reported.
In the first quarter of this year, pre-tax profits cooled to
a $1.9 trillion annual rate from a $1.95 trillion rate in the
fourth quarter. They also fell after taking into account taxes.
The Commerce Department seasonally adjusted the quarterly data.
The revisions come a month after the Federal Reserve also
made big downgrades in its estimates of the amount of cash held
The Fed tracks liquid assets, such as cash, held by
corporations outside of finance. In June, the central bank said
it had underestimated those holdings by about $500 billion at
the end of last year. Businesses were holding $1.7 trillion in
liquid assets, rather than $2.2 trillion.
Moreover, the Fed's revisions showed that while
corporations' cash horde grew in 2010, it stabilized in 2011.
The Commerce Department report also made revisions to its
estimates for economic growth that showed the 2007-2009
recession was a little less severe than thought and the
subsequent recovery more modest.
The economy contracted 4.7 percent during the recession,
rather than 5.1 percent as previously estimated. Since then,
total output has increased 5.8 percent, rather than 6.2 percent.