US corporate profits surge in fourth quarter

WASHINGTON (Reuters) - U.S. firm profits rebounded sharply successful the 4th quarter, but an uncertain economical outlook owed to tariffs is creating a challenging situation for businesses successful the archetypal quarter.

Profits from existent accumulation accrued $204.7 cardinal past quarter, the Commerce Department's Bureau of Economic Analysis (BEA) said connected Thursday. Profits declined $15.0 cardinal successful the July-September quarter.

President Donald Trump has announced a blizzard of tariff actions since taking bureau successful January. Economists person warned that the mode successful which the tariffs are being handled is not supportive of economical activity.

Business and user sentiment person sagged, which was reinforced by information connected Wednesday from 2 determination Federal Reserve banks and Duke University that showed optimism among institution main fiscal officers dropped successful the archetypal quarter.

Fears of higher prices from import duties led to pre-emptive buying of goods successful the 4th quarter, helping to boost user spending and keeping the economical enlargement connected track. Gross home merchandise accrued astatine an upwardly revised 2.4% annualized complaint past quarter, the BEA said successful its 3rd estimation of fourth-quarter GDP.

Growth was antecedently estimated to beryllium a 2.3% pace. The system grew astatine a 3.1% complaint successful the 3rd quarter.

The spot successful profits helped an alternate measurement of economical growth. Gross home income (GDI) grew astatine a 4.5% complaint past 4th aft rising astatine a 1.4% gait successful the July-September quarter.

In principle, GDP and GDI should beryllium equal, but successful signifier they disagree arsenic they are estimated utilizing antithetic and mostly autarkic root data. Annual benchmark revisions thin to adjacent the spread betwixt GDP and GDI.

The mean of GDP and GDI, besides referred to arsenic gross home output and considered a amended measurement of economical activity, accrued astatine a 3.5% rate. Gross home output grew astatine a 2.2% gait successful the 3rd quarter.

There are signs that GDP maturation has importantly slowed down successful the archetypal 4th due to the fact that of snowstorms and unseasonably acold upwind arsenic good arsenic commercialized argumentation uncertainty.

Growth estimates for the January-March 4th are mostly beneath a 1.5% complaint and the likelihood of a contraction are high. The Fed past week near involvement rates unchanged, an acknowledgement of the uncertainty swirling astir the economy.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)