STATE OF BUSINESS: The Better Half

For months Wall Street has been talking about a "profit squeeze" as if it were an indisputable fact for industry as a whole. Last week, as a flood of first-quarter-earnings reports poured out, the profit squeeze proved to be more fiction than fact. The firms that could not offset rising costs with increased business were far outnumbered by those that showed profits still on the upgrade. The profit squeeze did show up in the sense that earnings often failed to keep pace with the increase in sales. But overall corporate profits for...

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