Why U.S. Corporate Earnings Growth is Expected to be Lower for Q4 2018

U.S. Earnings Growth Q4

With the Q4 2018 U.S. earnings reporting season getting underway, it’s important to keep a couple of things in mind as companies begin to report.

Growth rates are expected to be lower in Q4 2018, but this makes sense given that the 20+ per cent results that we saw earlier in 2018 were largely driven by tax reform in the U.S. This had a dramatic impact on growth rates. With the lower tax rates having now normalized, growth rates are expected to be lower.

U.S. Earnings Growth Q4

This means that while the lower growth rates pictured in the chart (above) are not a surprise, they may look alarming at first glance if you don’t keep this point in mind.

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