Signal The US corporate profit share of GDP doubled against its pre-2000 average

Summary

MGI reports that US corporate profitability has risen sharply, with returns on invested capital climbing and corporate profits as a share of GDP doubling compared with their pre-2000 average. In the report's figures, after-tax profits averaged 5.9 percent of GDP before 2000 and 9.2 percent over 2000 to 2024. These record profits help explain why US equity values have risen to 2.4 times corporate net assets, far above the roughly 1.0 seen elsewhere. The expanding profit share is also named as a driver of the all-time high in US equity relative to GDP, alongside the tech and AI boom. The report cautions that high US valuations fundamentally depend on earnings continuing to grow faster than GDP over the long run.