US companies' earnings growth outpaces global firms by 2.6 times
Summary
US companies have experienced a remarkable earnings growth of nearly +1,300% since 1990, significantly outpacing the +500% increase seen for global companies excluding the US, resulting in US earnings growth being 2.6 times that of the rest of the world. This disparity highlights the structural advantages of the US corporate sector, such as higher profitability and innovation, which have allowed US profit margins to remain elevated and take a historically large share of national income. Consequently, this strong earnings performance has contributed to a persistent valuation gap between US equities and international markets, demonstrating the US economy's exceptional standing.
Analysis
US Companies: US companies here refer broadly to publicly traded corporations headquartered in the United States, whose earnings are often proxied by major indices such as the S&P 500 and tracked by agencies like the BEA and investment research firms. In the news item, they are highlighted as having experienced dramatically faster earnings growth than companies in the rest of the world since 1990, putting the US corporate sector and economy “in a league of its own.” Global Companies: Global companies in this context refers to publicly listed corporations outside the United States, typically represented by developed ex‑US and emerging markets equity indices. In the news, these non‑US firms serve as the comparison group, with their earnings growth since 1990 significantly lagging US companies and their aggregate profit growth described as roughly flat between 2008 and 2025. Profit_Margins_US: Recent analysis of US corporate data shows that profit margins have remained elevated for an extended period, with profits taking a historically large share of national income, underscoring the strength of US corporate earnings. Global_Valuations_Gap: Recent investment commentary notes that stronger earnings growth and profitability in US companies compared with international markets has contributed to a persistent valuation gap between US equities and global ex‑US stocks. Earnings_Link_to_Economy: Research on long‑term trends finds that US earnings per share have grown faster than the underlying US economy, suggesting structural advantages such as higher profitability and innovation in the US corporate sector relative to many international peers.
Categories
macro
Related sources
- https://www.imfconnect.org/content/dam/imf/News%20and%20Generic%20Content/GMM/Special%20Features/Corporate%20Earnings%20Monitor%20Q3%202025.pdf
- https://www.bea.gov/data/income-saving/corporate-profits
- https://finance.yahoo.com/markets/article/corporate-profits-soar-to-the-highest-level-since-the-1950s-by-one-measure-180022338.html
- https://meketa.com/wp-content/uploads/2025/02/MEKETA_US-Corporate-Earnings.pdf
- https://hbwealth.com/insights/mind-the-global-valuations-gap-growth-and-profitability-shifts-support-international-equities/
- https://advisorscapital.com/wp-content/uploads/2026/01/JP-Morgan-guide-to-the-markets-us-2025.pdf
- https://finance.yahoo.com/markets/article/corporate-profits-were-already-at-historic-highs-they-shot-even-higher-in-q1-180022338.html
- https://fred.stlouisfed.org/series/CP
- https://www.richmondfed.org/research/national_economy/macro_minute/2026/profits_without_peril_record_earnings_dont_necessarily_mean_overheating
- https://cryptobriefing.com/us-corporate-profits-record-gdp/
- https://tradingeconomics.com/united-states/corporate-profits
- https://fred.stlouisfed.org/series/A448RC1Q027SBEA
- https://cryptobriefing.com/us-corporate-profits-record-margins-q2-2026/
- https://cryptobriefing.com/us-corporate-profits-near-record-gdp-share-q1-2026/
- https://fred.stlouisfed.org/series/BOGZ1FA106060005A