US corporate profits rise nearly 10%, driving record profit margins not seen since the 1940s
After-tax profit margins hit 19.4% of gross value added in the second quarter, the highest level in over 80 years of recorded data
American corporations just posted their best quarter in a very long time. Profits from current production jumped $400.9 billion in Q2 2026, according to Bureau of Economic Analysis data released on August 26. That’s more than five times the $74.4 billion gain from the prior quarter.
The result: after-tax profits as a share of gross value added reached 19.4%, up from 18.2% in Q1. That’s the highest level on record since the data series began in the 1940s.
The numbers behind the surge
Total corporate profits, adjusted for inventory valuation and capital consumption, hit $4,827 billion on a seasonally adjusted annual rate basis in Q2. That’s roughly 9% higher than the $4,426 billion recorded in Q1.
The BEA data landed alongside a broader picture of economic resilience. Real GDP grew at a 1.5% annualized rate in the second estimate. Nonresidential fixed investment expanded at an 8.5% annualized pace.
Macro, rates, and crypto—what moved markets and what matters next.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
Richard Moody, chief economist at Regions Financial, connected the dots directly.
“Profit growth is freeing up cash that is helping support business capital spending, with cap-ex growth extending beyond AI related investment.”
Why margins are so wide
For the S&P 500 specifically, the earnings season aligned with this government data told a similar story. Blended earnings growth hit approximately 50% year-over-year, and net profit margins reached multi-year highs across the index.
What this means for markets and the economy
The 1.5% GDP growth rate offers a subtle warning. An economy growing at a modest pace while corporate profits surge nearly 10% in a single quarter suggests the gains are coming more from margin expansion than from volume growth.