Because they give businessmen both the impetus and the means to hire, build and modernize, profits are the power behind economic exuberance. By that gauge, the current prolonged business expansion stands a good chance of continuing. The Commerce Department reported last week that profits after taxes rose to a near-record annual rate of $26.8 billion in the second quarter, up 5½ from 1963's first three months. More important, profits have been moving up for nine quarters—about twice as long as in any previous postwar recovery.
The profit climb has continued because of the happy conjunction of strong demand, stable costs...
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