S&P 500 earnings (blue line) have been rising despite the continued decrease in capacity utilization (gold line).
Earnings vs. Capacity Utilization
Source: Chart of the Day
This excess capacity is the hangover from the massive over-investment in tech and telecom during the 90s bubble.
Gains in Wages Expected to Give Economy a Lift
Quote of the Day:
“The world economy is volatile enough without a loose cannon at the U.S. Treasury.” –Paul Erdman