U.S. corporate profits are hovering around an all-time high, despite the challenges of lockdowns due to the pandemic. And according to our most recent visualization, some of the most profitable industries and sectors just might surprise you.
- U.S. corporations generate most of their profits in domestic industries, not international markets ($6.8T vs. $1.7T).
- The financial sector generates more net income than every other U.S. company in international markets ($1.9T vs. $1.7T).
- High-flying tech companies overall make less money than less flashy industries, like retail trade and durable goods ($522B vs. $860B and $645B, respectively).
We found the data for our visualization thanks to researchers at the U.S. Bureau of Economic Analysis (BEA). We broke down the figures into several different underlying categories. At the most basic level, we split U.S. corporate profits between domestic and international markets. We then added subsequent layers in our breakdown, across financial and non-financial industries, and their underlying sectors. Our visualization therefore contains both high-level information about the source of U.S. corporate profits, and detailed stats on the specific industries and sectors earning the most money.
Our visualization shows how U.S. companies make the majority of their profits here in the United States, not through overseas operations ($6.8T domestic vs. $1.7T international). President Biden recently articulated a spending program backed by raising taxes on corporations, focusing on taxing their overseas earnings. Although U.S. companies do make a lot of money through their international operations, the vast majority of net income continues to come directly from the American market. That being said, U.S. companies shoulder a lighter tax burden compared to other developed countries.
But our visualization also demonstrates the specific industries and sectors generating the most profit. It’s no surprise the financial industry is huge, with some $1.9T in annual profits. That single industry is more profitable than the entire combined total of U.S. corporate profits from overseas. One unexpected takeaway from our visual is how information companies aren’t the most profitable in the U.S. With $522B in annual net income, IT companies aren’t exactly strapped for cash, but that’s still less than retail trade ($860B) and durable goods ($645B). Compare that to oil and petroleum companies, which only generate $76B in profits.
Are you surprised that financial institutions make so much money compared to other industries? Do you think Biden’s proposal to tax international earnings will raise enough money to fund his spending programs? Let us know in the comments.
Data: Table 1.1