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How do profits grow 8% if the economy grows 3%. It does seem counterintuitive. This is the best answer I've seen: https://economics.stackexchange.com/a/21617/7

• Jensson 4y ago
  They predicted that companies will be able to extract more value from workers in the future. In other words, they think that the top 1% will continue to get relatively richer at a faster rate, as long as that is true profits can improve without the economy improving.
  • eloff 4y ago
    That just means the economy will continue to grow, it doesn't specify how the stock market can grow faster than the economy.
    • nostrademons 4y ago
      The 2% economic growth rate is an average. It might be the case that the average worker's real wage grows 0% (this is basically true [1]), while corporate profits, which make up ~10% of the U.S. economy [2], grow 20%/year. [1] https://en.wikipedia.org/wiki/Real_wages#/media/File:United_States_real_wages_(red,_in_constant_2017_dollars).png https://en.wikipedia.org/wiki/Real_wages#/media/File:United_... [2] https://fred.stlouisfed.org/graph/?g=1Pik https://fred.stlouisfed.org/graph/?g=1Pik