Scott Sumner is suspicious.

Here is the evolution of labor compensation and corporate after-tax profits over the past 9 quarters:

Total labor compensation: $8315.3b. —-> $9049.5b. Up 8.8%

After-tax corporate profits: $1184.6b. —-> $1099.5b. Down 7.2%

…I know of no other data confirming that plunge. Stock prices are soaring. Corporations have been reporting very strong earnings. If someone can find non-government data supporting the claim that workers are far outperforming corporations in recent years, I’d love to see the evidence.

Robert Shiller tracks the data for the S&P 500. His earnings measure only goes through the end of 2013. From December 2011 to December 2013, he shows the S&P 500 up 45 %, dividends up 32 percent, and earnings up 15 percent. Since then, stock prices have gone up more than 5 percent, so if profits truly took a dive then the market is doing a great job of ignoring it.

We are going to see some upward revisions in Commerce Department data for corporate profits or some downward adjustment in stock prices. Personally, I expect to see some of both.