And the Good Times Keep On Rolling...

...For the owners of large US corporations, anyway. Bloomberg reports:

Profit Growth in U.S Tops 10 Percent Again, Surprising Analysts

Profits at U.S. companies rose by more than 10 percent for the 19th straight quarter in the period ended March 31 as MasterCard Inc., Hewlett-Packard Co. and Prudential Financial Inc. surprised analysts with better-than- estimated earnings.

Companies in the Standard & Poor's 500 Index through May 11 reported an average earnings gain of 13 percent in the quarter, according to data compiled by Bloomberg. The last time growth was less than 10 percent was the second quarter of 2002.

International sales helped by a weaker U.S. dollar and continued spending by U.S. consumers fueled the earnings advance. Concerns that the U.S. housing slump and rising delinquencies by subprime mortgage holders would damp profits have eased, analysts said.

The results are "an upside surprise anyway you slice it," said Alec Young, an equity market strategist at Standard & Poor's in New York. Worries about housing and mortgages were "wrong-headed," he said.

First-quarter earnings advanced four times faster than analysts had projected as of April 13, as 76 percent of the 444 companies in the S&P 500 that reported through May 11 met or topped projections. Twenty-seven percent beat estimates by at least 10 percent.

...The unexpected surge in profits helped push the Dow Jones Industrial Average to a record 13,369.2 on May 9, while the S&P 500 closed that day within 1 percent of its 2000 record. The Dow finished at 13326.2 on May 11, up 6.9 percent for the year. The S&P 500 was at 1505.8, up 6.2 percent this year.

I'm on record as suggesting that such profit growth can't continue forever. It will be interesting to see whether the official national income statistics (NIPA) measurements of profits agree that there was such continued growth in profits in the first quarter of 2007. If you recall, toward the end of the last business cycle expansion, profit growth as announced on Wall Street far exceeded actual (real) profit growth, as measured by the NIPA. To some, this was an early indication that trouble was brewing...